CZ Seeks Dismissal of FTX’s $1.7 Billion Lawsuit Over Alleged Token Dump
Changpeng “CZ” Zhao, the co-founder and former CEO of Binance, has filed a motion to dismiss a lawsuit brought against him by the bankruptcy estate of FTX. The motion was submitted on August 4, 2025, and challenges both the legal process and the claims made by FTX.
FTX’s $1.7 Billion Allegations Against CZ
The lawsuit originated in November 2024, when FTX’s bankruptcy estate sued both Binance and CZ. The case centers on allegations that Alameda Research, FTX’s sister company, improperly funded a $1.7 billion share repurchase arranged in 2021. FTX contends that CZ obtained access to these funds through an illegal transfer.
The bankruptcy estate further alleges that CZ played a role in destabilizing FTX, which ultimately collapsed in 2022. According to the lawsuit, specific tweets and public statements made by CZ created concerns about FTX’s financial stability. The estate maintains that these actions contributed directly to the company’s downfall.
📢📢@binance Co-Founder CZ Requests Court to Dismiss $1.76 Billion Clawback Lawsuit Filed by FTX Estate
🔹Changpeng Zhao @cz_binance has filed a motion in U.S. bankruptcy court to dismiss a $1.76 billion lawsuit filed by the FTX estate.
🔹He argues the court lacks… pic.twitter.com/6Jn3mse1pR
— UnoCrypto (@unocrypto_com) August 6, 2025
CZ’s Defense Strategy and Jurisdictional Challenges
CZ is mounting a vigorous defense against these allegations. His motion argues that the Delaware court lacks proper jurisdiction to hear the case. He contends that the lawsuit was improperly served, noting that he resides in the United Arab Emirates while legal notice was delivered through his U.S.-based attorneys. His legal team argues this procedure violates international law protocols.
The motion also emphasizes that most key entities and individuals involved in the case operate outside U.S. jurisdiction. Alameda Research is incorporated in the British Virgin Islands, while Binance entities are established in Ireland and the Cayman Islands. CZ’s lawyers argue that U.S. laws, which form the basis of FTX’s case, should not apply to these international entities.
Beyond jurisdictional issues, CZ firmly denies the lawsuit’s core allegations. He characterizes the case as fundamentally flawed and without merit. According to his legal filing, Binance and FTX maintained only a brief business partnership that ended well before FTX’s collapse.
CZ specifically disputes claims that Binance’s decision to sell FTT tokens in 2022 contributed to FTX’s downfall. He maintains that this sale occurred more than a year after the partnership between the companies had already terminated.
This legal battle represents the latest chapter in an ongoing conflict between CZ and FTX. Binance was previously called to testify in a British court regarding FTX matters in 2022. FTX pursued another lawsuit against CZ in 2023, focusing on his social media posts, which they claimed damaged the company’s reputation. Sam Bankman-Fried has also publicly blamed CZ for the liquidity crisis that ultimately brought down FTX.
According to CZ’s legal team, FTX’s lawyers have struggled to achieve significant success in court proceedings related to this case. They suggest that FTX is now attempting to shift blame away from its own leadership failures onto external parties.
CZ is requesting that the court dismiss the entire case, maintaining that it suffers from both legal deficiencies and factual inaccuracies. The case remains pending, and the court must now decide whether these claims can move forward.
Market Sentiment Implications
This high-profile legal battle between major crypto industry figures could weigh on overall market sentiment as it highlights ongoing regulatory uncertainties. The prolonged litigation may continue to cast a shadow over confidence in major crypto exchanges and their leadership.