Binance Ex-CEO Changpeng ‘CZ’ Zhao Wants Court to Dismiss FTX’s $1.8B Lawsuit

Changpeng ‘CZ’ Zhao, the founder and ex-CEO of the world’s largest exchange, Binance, has moved to court to challenge a lawsuit leveled against him by collapsed exchange FTX. Initially filed last November, the lawsuit seeks to recover $1.8 billion in various cryptocurrencies sent to Binance four years ago.

FTX’s court filings show that the funds were transferred to Zhao’s exchange in July 2021 after former FTX CEO Sam Bankman-Fried entered a deal to buy back a 20% equity stake that Binance was holding at the time. The two exchanges started their strategic relationship in 2019 when Binance became an early investor in FTX.

However, the relationship turned sour, prompting Bankman-Fried to end it by buying back Binance’s stake using FTX’s native token FTT. It was later discovered that Bankman-Fried had misappropriated user funds to enter the equity buyback deal. Now, the FTX estate, tasked with recovering funds and compensating affected FTX users, has told the court that the $1.8 billion transfer to Binance was fraudulent and that its former CEO, Zhao, who oversaw the transaction, should make a refund.