---
title: "FTX sues Binance, ex-CEO Zhao seeking $1.8bn clawback"
description: "FTX filed a lawsuit against Binance Holdings Ltd. and its former CEO Changpeng Zhao, seeking to claw back almost $1.8-billion it alleges was fraudulently transferred by Sam Bankman-Fried."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Newsdeck"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2024-11-12-ftx-sues-binance-ex-ceo-zhao-seeking-1-8bn-clawback/"
published: "2024-11-12T05:21:14"
updated: "2024-11-12T05:24:00"
lang: "en-ZA"
word_count: 306
---

# FTX sues Binance, ex-CEO Zhao seeking $1.8bn clawback

> FTX filed a lawsuit against Binance Holdings Ltd. and its former CEO Changpeng Zhao, seeking to claw back almost $1.8-billion it alleges was fraudulently transferred by Sam Bankman-Fried.

By Bloomberg · Published 12 November 2024, 07:21 SAST · Updated 12 November 2024, 07:24 SAST

## Key points
- In a plot twist worthy of a financial thriller, Binance executives are now embroiled in a legal drama over a $1.76 billion share repurchase deal with imprisoned FTX co-founder Sam Bankman-Fried, who allegedly used a mix of crypto tokens to fund a transaction that the now-defunct FTX estate claims was more fraudulent than a three-card Monte game on the streets of Vegas.
- Binance and its executives allegedly received $1.76 billion in a share repurchase from FTX's Bankman-Fried, involving stakes in both international and US entities.
- The FTX estate claims the deal was fraudulent, asserting the companies were insolvent from inception or by early 2021.
- Zhao faces accusations of posting misleading tweets that contributed to FTX's collapse, including a damaging announcement about selling FTT tokens.
- FTX's bankruptcy lawsuit includes multiple defendants, with claims extending to political groups and other digital asset exchanges.

## Content

Binance, Zhao and other Binance executives received the funds as part of a July 2021 share repurchase deal with Bankman-Fried, the FTX co-founder who is now in prison. In that transaction, they sold stakes of about 20% in FTX’s international unit and 18.4% in its US-based entity, according to a legal filing from the FTX estate on Sunday.

Bankman-Fried paid for the stock repurchase using a mix of FTX’s exchange token FTT and Binance-branded coins BNB and BUSD valued at $1.76-billion at the time, according to the filing.

FTX and its sister trading house Alameda Research “may have been insolvent from inception and certainly were balance-sheet insolvent by early 2021,” the estate said in the filing. As a result, the share repurchase deal was made fraudulently, it alleged.

FTX also accused Zhao of posting a series of “false, misleading, and fraudulent tweets” shortly before FTX’s collapse, the content of which was “maliciously calculated to destroy his rival.” A 6 November 2022 tweet by Zhao stated that Binance intended to sell its FTT tokens, worth some $529-million at the time, causing withdrawals from the exchange to skyrocket.

“The claims are meritless, and we will vigorously defend ourselves,” a Binance spokesperson said in a statement on Monday. A representative for Zhao didn’t immediately reply to an e-mailed request for comment

The lawsuit is one of many filed by FTX in the bankruptcy court of Delaware; other defendants include former White House communications officer Anthony Scaramucci, digital-asset exchange Crypto.com and political groups such as the Mark Zuckerberg-founded FWD.us, court documents show.

“In 2021 and 2022, FWD.us was one of several organisations that received funding from a nonprofit organisation run by a family member of Sam Bankman-Fried to work on improving the family-based and employment-based immigration systems and enhancing American competitiveness,” a spokesperson for FWD.us said in an emailed statement.