Changpeng “CZ” Zhao asked an American bankruptcy court to reject the trial of $ 1.76 billion in FTX, saying that the court does not have jurisdiction over a foreign resident involved in offshore transactions.
Summary
- CZ requests the dismissal of the CLAWBACK combination of 1.76b of FTX, citing the lack of American jurisdiction.
- The action agreement contested in 2021 involved offshore entities and foreign transfers.
- The request calls for the American bankruptcy law does not apply; The decision is still pending.
The request was filed on August 4 before the Delaware bankruptcy court, according to a Bloomberg report Law. The trial focuses on a share repurchase agreement in July 2021 between FTX and Binance, in which FTX would have sent $ 1.76 billion, via Alameda Research, to buy Binance’s equity.
The succession of FTX’s bankruptcy affirms that the transaction was inappropriate and seeks to recover the funds under the American bankruptcy law. Zhao maintains that the agreement was entirely led by foreign entities, including companies from the British Virgin Islands, Ireland and the Cayman Islands, placing it out of the reach of American statutes.
Jurisdictional challenge and defense
Zhao’s legal team said he lived in the United Arab Emirates and had no significant link with Delaware or the United States. The request affirms that the American bankruptcy law does not apply to alleged transfers, which were not domestic and that the American legal adviser service of a foreign part is not sufficient under the law.
Zhao described himself as a “nominal counterpart” in the transaction and said that the complaint was trying to keep him unjustly responsible for the internal failures of FTX. Two former Binance leaders appointed in the same case, Samuel Wenjun Lim and Dinghua Xiao, also deposited to be withdrawn from the trial last month.
FTX collapse legal battles
This is one of the many legal confrontations to arise from the collapse of the FTX in 2022. The bankruptcy of the FTX continued Binance and Zhao in 2024, seeking to recover funds and to claim reputation damage.
CZ himself was confronted with legal problems, pleading guilty to American violations of fighting money laundering and serving a four-month sentence, while Sam Bankman Fried purge 25 years for fraud.
