The FTX Recovery Trust is suing Binance and Changpeng Zhao to claw back roughly $1.76B FTX paid in July 2021 to repurchase Binance’s equity stake, plus billions more in damages over Zhao’s November 2022 tweets that helped trigger FTX’s collapse.
LATEST DEVELOPMENT · JUL 24, 2026
On July 24, 2026, Chief Bankruptcy Judge Karen B. Owens ruled on the pending motions to dismiss, allowing the Trust’s core $1.76B clawback claims over the 2021 share repurchase to proceed against four Binance entities and Changpeng Zhao. The court found an initial showing of personal jurisdiction and a plausibly alleged domestic transfer, but dismissed separate damages claims tied to FTX’s November 2022 collapse, including those premised on Zhao’s tweets.
BACKGROUND
In July 2021, FTX repurchased Binance’s early-investor stake, roughly 20% of FTX Trading and 18.4% of its US entity, paying in FTT, BNB and BUSD then valued at about $1.76B. The Trust’s November 2024 adversary complaint alleges Alameda funded the buyback while the FTX group “may have been insolvent from inception” and was certainly balance-sheet insolvent, making the transfer avoidable as a fraudulent conveyance. It also seeks billions in damages over Changpeng Zhao’s 6 November 2022 tweets announcing Binance would dump its FTT holdings (then worth about $529M), which the Trust casts as false and calculated to destroy a competitor, triggering the run that pushed FTX into Chapter 11 days later.
The Binance defendants moved to dismiss in May 2025, calling the complaint “legally deficient”: US avoidance statutes do not reach a foreign-to-foreign transfer, the buyback sits within the Bankruptcy Code’s securities safe harbor, and the Delaware court lacks personal jurisdiction over foreign entities. Zhao followed on 4 August 2025, arguing that a UAE resident improperly served through US counsel is beyond the court’s reach, that the statutes lack extraterritorial application, and that FTX’s collapse was Sam Bankman-Fried’s fraud alone. The motions are fully briefed and awaiting decision, expected in the second half of 2026. Zhao’s October 2025 presidential pardon erased his criminal conviction but does not touch this civil suit.
TIMELINE
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JUL 24, 2026FILINGBankruptcy court partially grants, partially denies motions to dismissChief Bankruptcy Judge Karen B. Owens ruled that the Trust’s core clawback claims over the 2021 Binance share repurchase (about $1.76B) may proceed against four Binance entities and Changpeng Zhao, finding an initial showing of personal jurisdiction and a plausibly alleged domestic transfer. She dismissed separate damages claims tied to FTX’s November 2022 collapse, including claims premised on Zhao’s pre-collapse tweets.
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OCT 23, 2025OTHERTrump pardons Zhao’s criminal convictionThe pardon covers Zhao’s 2023 guilty plea to anti-money-laundering failures. It has no effect on the civil clawback claims.
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AUG 4, 2025PROCEDURALZhao moves to dismiss for lack of personal jurisdictionZhao argued he is a UAE resident improperly served through US counsel and a “nominal counterparty” to transfers far removed from Delaware.
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MAY 2025PROCEDURALBinance defendants move to dismissBinance argued the complaint is “legally deficient”: no extraterritorial reach for US avoidance law, safe-harbor protection for the share repurchase, and no personal jurisdiction over foreign entities.
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NOV 10, 2024FILINGFTX estate sues Binance and ZhaoThe adversary complaint seeks avoidance of the $1.76B buyback as a fraudulent transfer, alleging balance-sheet insolvency in July 2021, plus billions in damages tied to Zhao’s November 2022 conduct.
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NOV 2022OTHERZhao’s FTT tweets precede the run on FTX. Chapter 11 followsOn November 6, 2022, Zhao announced Binance would liquidate its FTT holdings. FTX filed for bankruptcy on November 11, 2022.
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JUL 2021OTHERFTX repurchases Binance’s stake for ~$1.76BFTX bought back Binance’s ~20% stake in FTX Trading and ~18.4% of its US entity, funded by Alameda in FTT, BNB and BUSD valued at about $1.76B.