Technology
Binance CEO Zhao brushes off $2.1 billion FTX clawback concerns
Binance chief executive Changpeng “CZ” Zhao dismissed concerns that his company could have $2.1 billion clawed back as a result of FTX’s bankruptcy proceedings, in an appearance on Squawk Box Thursday morning, and told CNBC that he trusted his lawyers to handle the proceedings.
CNBC’S Andrew Ross Sorkin and Becky Quick pressed Zhao on whether he expected to be able to return that $2.1 billion payment from FTX, which Binance earned when it exited its 2019 Series A investment with FTX, to bankruptcy trustees who will be looking to claw back any fraudulent conveyances made by FTX to outside businesses or investors.
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“Would you be able to handle it if somebody asked you for $2.1 billion back,” CNBC’s Becky Quick asked him.
“We are financially okay,” Zhao said, evading a straight answer.
If bankruptcy proceedings can establish that a payment was made through proceedings of fraud or that an individual should have reasonably known that a payment was fraudulent, any beneficiary in a two-year lookback window can have their gains clawed back by the trustee.
“Are you prepared to send that money to them?” Sorkin asked Zhao.
“I think we’ll leave that to the lawyers. I think our legal team is perfectly capable of handling it,” Zhao responded before attempting to pivot away to FTX’s well-documented spending habits.
Zhao told Sorkin that the repayment was a combination of BUSD, BNB, and FTT tokens. Zhao claimed that the FTT portion of the repayment was significant but that the company had “forgotten” about it.
“We have very solid revenue,” Zhao said.