Binance has filed a motion to dismiss a $1.76 billion lawsuit brought by the FTX estate, accusing the defunct crypto exchange of trying to deflect blame for its own failure.
Filed on May 16 in the Delaware Bankruptcy Court, Binance’s legal team called the suit “legally deficient,” stating that FTX’s collapse was not triggered by market manipulation or hostile action but by internal misconduct.
“Plaintiffs are pretending that FTX did not collapse as the result of one of the most massive corporate frauds in history,” the filing said, pointing to Sam “SBF” Bankman-Fried’s conviction on seven counts of fraud and conspiracy.
FTX’s estate alleges that Binance received billions in crypto during a 2021 buyback deal, funded improperly with customer assets.
Binance rejects this claim, stating that “FTX remained a going concern for 16 months” after the share repurchase and that there was “no plausible claim” the exchange was insolvent at the time.
Binance filing to dismiss FTX’s lawsuit against the exchange. Source: Law360news
The lawsuit also accuses former Binance CEO Changpeng Zhao of triggering a collapse through a tweet on Nov. 6, 2022 announcing the liquidation of FTT tokens.
In response, Binance argued that Zhao’s tweet was based on publicly known concerns. “Binance’s decision to liquidate its remaining FTT was, in fact, ‘due to recent revelations ’— in particular, the Nov. 2, 2022, CoinDesk article” that exposed Alameda Research’s balance sheet.
The company further defended Zhao’s comment that Binance would aim to minimize market impact. “The Complaint contains no such facts” to prove Binance had no intention of following through.
CZ announced plans to liquidate FTT holdings in 2022. Source: CZ
In challenging the court’s jurisdiction, Binance said none of the foreign entities named “are incorporated in or maintain their principal place of business in the United States,” and thus fall outside the court’s reach.
The filing also criticizes the plaintiff’s narrative as “a grab bag of state law claims” based on “pure conjecture — much of it sourced from a convicted fraudster’s hindsight speculation.”
Binance has asked the court to dismiss all claims with prejudice. The FTX estate has not yet filed its response.
In a May 15 notice, the FTX Recovery Trust announced that over $5 billion will be distributed starting May 30 through BitGo and Kraken, targeting parties in the second eligible group under the exchange’s reorganization plan.
According to the plan, five creditor groups categorized as “convenience classes” are expected to receive between 54% and 120% of their claims. In total, FTX may repay up to $16 billion, depending on the final number of valid claims.
A hostile environment era deportation policy for criminals is being expanded by the Labour government as it continues its migration crackdown.
The government wants to go further in extraditing foreign offenders before they have a chance to appeal by including more countries in the existing scheme.
Offenders that have a human right appeal rejected will get offshored, and further appeals will then get heard from abroad.
It follows the government announcing on Saturday that it wants to deport criminals as soon as they are sentenced.
The “deport now, appeal later” policy was first introduced when Baroness Theresa May was home secretary in 2014 as part of the Conservative government’s hostile environment policy to try and reduce migration.
It saw hundreds of people returned to a handful of countries like Kenya and Jamaica under Section 94B of the Nationality, Immigration and Asylum Act 2002, added in via amendment.
In 2017, a Supreme Court effectively stopped the policy from being used after it was challenged on the grounds that appealing from abroad was not compliant with human rights.
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However, in 2023, then home secretary Suella Braverman announced she was restarting the policy after providing more facilities abroad for people to lodge their appeals.
Now, the current government says it is expanding the partnership from eight countries to 23.
Previously, offenders were being returned to Finland, Nigeria, Estonia, Albania, Belize, Mauritius, Tanzania and Kosovo for remote hearings.
Angola, Australia, Botswana, Brunei, Bulgaria, Canada, Guyana, India, Indonesia, Kenya, Latvia, Lebanon, Malaysia, Uganda and Zambia are the countries being added – with the government wanting to include more.
Image: Theresa May’s hostile environment policy proved controversial. Pic: PA
The Home Office claims this is the “the government’s latest tool in its comprehensive approach to scaling up our ability to remove foreign criminals”, touting 5,200 removals of foreign offenders since July 2024 – an increase of 14% compared with the year before.
Home Secretary Yvette Cooper said: “Those who commit crimes in our country cannot be allowed to manipulate the system, which is why we are restoring control and sending a clear message that our laws must be respected and will be enforced.”
Foreign Secretary David Lammy said: “We are leading diplomatic efforts to increase the number of countries where foreign criminals can be swiftly returned, and if they want to appeal, they can do so safely from their home country.
“Under this scheme, we’re investing in international partnerships that uphold our security and make our streets safer.”
Both ministers opposed the hostile environment policy when in opposition.
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In 2015, Sir Keir Starmer had questioned whether such a policy was workable – saying in-person appeals were the norm for 200 years and had been a “highly effective way of resolving differences”.
He also raised concerns about the impact on children if parents were deported and then returned after a successful appeal.
In today’s announcement, the prime minister’s administration said it wanted to prevent people from “gaming the system” and clamp down on people staying in the UK for “months or years” while appeals are heard.
TRM Labs says the Embargo ransomware group has moved over $34 million in ransom-linked crypto since April, targeting US hospitals and critical infrastructure.