The FTX Recovery Trust is suing Binance and Changpeng Zhao in the U.S. Bankruptcy Court for the District of Delaware. It seeks to claw back about $1.76B that FTX paid in July 2021 to repurchase Binance’s equity stake, alleging a fraudulent transfer. On July 24, 2026, the court allowed the core clawback claims to proceed against four Binance entities and Zhao but dismissed damages claims tied to FTX’s November 2022 collapse.
Latest development Jul 24, 2026
On July 24, 2026, the bankruptcy court let the Trust’s core $1.76B clawback claims over the 2021 share repurchase proceed against four Binance entities and Changpeng Zhao. In partly denying the motions to dismiss, it found an initial showing of personal jurisdiction and a plausibly alleged domestic transfer. The court dismissed separate damages claims tied to FTX’s November 2022 collapse, including those premised on Zhao’s tweets.
Why it matters
The dispute tests whether U.S. avoidance law reaches transfers between offshore crypto entities and whether a Delaware court can exercise personal jurisdiction over foreign exchange groups. The answer will shape how far the FTX estate, and future crypto bankruptcies, can pursue value that moved between foreign entities.
Background
In July 2021, FTX repurchased Binance’s early-investor stake, roughly 20% of FTX Trading and 18.4% of its U.S. entity. It paid in FTT, BNB, and BUSD, then valued at about $1.76B. On November 6, 2022, Changpeng Zhao announced in tweets that Binance would liquidate its FTT holdings, then worth about $529M. A run on FTX followed, and FTX filed for Chapter 11 on November 11, 2022.
In November 2024, the FTX Recovery Trust filed an adversary complaint in the U.S. Bankruptcy Court for the District of Delaware, within FTX’s Chapter 11 case. The complaint alleges that Alameda funded the buyback while the FTX group “may have been insolvent from inception” and was certainly balance-sheet insolvent. On that basis, the Trust seeks to avoid the transfer as a fraudulent conveyance. It also seeks billions of dollars in damages over Zhao’s tweets. The Trust alleges the tweets were false, were calculated to destroy a competitor, and triggered the run that pushed FTX into Chapter 11 days later.
The Binance defendants moved to dismiss in May 2025, calling the complaint “legally deficient.” They argued that U.S. avoidance statutes do not reach a foreign-to-foreign transfer and that the buyback falls within the Bankruptcy Code’s securities safe harbor. They also argued that the court lacks personal jurisdiction over the foreign entities. Zhao moved to dismiss on August 4, 2025, arguing that a UAE resident improperly served through U.S. counsel is beyond the court’s reach. He also contended that the statutes lack extraterritorial application and that FTX’s collapse was Sam Bankman-Fried’s fraud alone.
On October 23, 2025, President Trump pardoned Zhao for his 2023 guilty plea to anti-money-laundering failures, but the pardon does not affect this civil suit. On July 24, 2026, Chief Bankruptcy Judge Karen B. Owens partially granted and partially denied the motions to dismiss. The court allowed the core fraudulent-transfer claims over the $1.76B buyback to proceed against four Binance entities and Zhao. It found an initial showing of personal jurisdiction and a plausibly alleged domestic transfer. It dismissed the collapse-related tort and unjust-enrichment claims, including those premised on Zhao’s tweets, and the clawback counts against two individual defendants.
Timeline 7 events
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JudgmentBankruptcy court partially grants, partially denies motions to dismiss
The court let the core clawback claims over the $1.76B 2021 share repurchase proceed against four Binance entities and Zhao. It dismissed separate damages claims tied to FTX’s November 2022 collapse, including those premised on Zhao’s tweets.
Judge lets FTX recovery trust chase Binance for $1.76 billion over a 2021 share buybackFTX's $1.8B Clawback Suit Against Binance, Zhao Can Proceed
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OtherTrump pardons Zhao over 2023 anti-money-laundering guilty plea
The pardon has no effect on the civil clawback claims.
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OrderZhao moves to dismiss for lack of personal jurisdiction
Zhao argued he is a UAE resident improperly served through U.S. counsel and a “nominal counterparty” to transfers far removed from Delaware.
Changpeng Zhao files motion to dismiss $1.7 billion FTX suit
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OrderBinance defendants move to dismiss
Binance argued the complaint is “legally deficient.” It contended that U.S. avoidance law has no extraterritorial reach, that the safe harbor protects the share repurchase, and that the court lacks personal jurisdiction over foreign entities.
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FilingFTX estate sues Binance and Zhao
The 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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OtherZhao’s FTT tweets precede run on FTX and Chapter 11 filing
On November 6, 2022, Zhao announced Binance would liquidate its FTT holdings. FTX filed for bankruptcy on November 11, 2022.
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OtherFTX repurchases Binance’s stake for about $1.76B
FTX bought back Binance’s roughly 20% stake in FTX Trading and 18.4% of its U.S. entity. Alameda funded the buyback in FTT, BNB, and BUSD.
Experimental AI forecast
How it is madeWill the FTX Recovery Trust’s $1.76 billion clawback claims against the Binance entities be resolved by settlement or judgment by March 31, 2029?
- Trust settles with Binance45%
- Still pending on March 31, 202937%
- Binance defeats clawback claims12%
- Court avoids the buyback transfer6%
- Resolves by
- Mar 31, 2029in 29 months
- Record confidence
- Medium
A settlement between the FTX Recovery Trust and Binance is the most likely outcome by March 31, 2029, at 45%. The July 24, 2026, ruling kept the $1.76 billion clawback alive and put Binance at real risk. Still, cross-border discovery and possible appeals could keep the case pending past that date.
How it resolves. Resolves by the first qualifying event in Adv. Proc. No. 24-50222 on or before March 31, 2029. Settlement: the bankruptcy court approves a settlement, or the parties file a stipulated dismissal, resolving the clawback claims against the Binance defendants. Trust prevails: a court enters judgment avoiding the 2021 buyback transfer in any amount against any Binance defendant. Binance prevails: a court enters judgment for the Binance defendants on all remaining clawback claims, including dismissal ordered on appeal. Otherwise, still pending.
Reasoning
Starting point. Large bankruptcy fraudulent-transfer adversary proceedings that survive a motion to dismiss: Most avoidance actions that survive dismissal settle before trial, often 60% to 80%, but large cross-border cases can take three to five years.
Fraudulent-transfer adversary proceedings that survive dismissal settle far more often than they reach judgment, and the FTX estate has settled many of its clawback suits. The July 24, 2026, ruling found an initial showing of personal jurisdiction and a plausibly alleged domestic transfer, which raises Binance’s exposure and settlement value. Dismissal of the collapse-related tort claims narrows the case and makes a deal easier to price. Against that, Binance can still contest extraterritoriality, the securities safe harbor, and insolvency at summary judgment or on appeal, which could win the case outright. Discovery from roughly 40 foreign affiliates and a UAE-resident individual will be slow, so a merits judgment before 2029 is unlikely. A trial win for the Trust within the window is therefore a long shot. The leading alternative to settlement is that the case remains in discovery or summary judgment briefing on March 31, 2029. The record shows no scheduling order or trial date, which limits precision.
Core clawback claims survived the July 2026 motion to dismiss · FTX estate’s pattern of settling clawback litigation · Unresolved safe harbor and extraterritoriality defenses · Slow cross-border discovery against foreign entities and Zhao · No scheduling order or trial date in the record
Generated automatically by Claude Opus 5.5 on Sep 24, 2026 from this case’s record on this site, and published without editorial review. The probabilities are the model’s judgment, not measured frequencies, and they are scored publicly as cases resolve. Not legal or investment advice. How the forecasts are made