Binance Founder Doubles Down in High-Stakes $1.76B Legal Showdown

Crypto's most-watched courtroom drama just got hotter.

Binance's founder is throwing punches in a $1.76 billion legal fight that could reshape crypto regulation—or prove the industry still plays by its own rules. The move comes as traditional finance watches from the sidelines, clutching their compliance manuals.

Why this matters now

With regulators globally cracking down, the outcome could set precedent for how crypto giants navigate legal gray areas. Or as Wall Street would say: 'How much you can get away with before writing a check.'

The playbook:

- Aggressive defense strategy that bypasses traditional settlement approaches
- Potential ripple effects across ongoing SEC/CFTC cases
- Market reaction: BNB price holding surprisingly steady (for now)

One thing's certain—when billion-dollar fines become just another cost of doing business, somebody's risk models need recalibrating.

FTX Bankruptcy’s $1.76 Billion Allegation

The FTX bankruptcy estate accuses Zhao and Binance of unlawfully seizing approximately $1.76 billion in cryptocurrency during their share buyback transactions from former CEO Sam Bankman-Fried. The allegations state that Binance acquired cryptocurrency under a payment package to repurchase 20% of its global operations and 18.4% of its American subsidiary’s shares.

FTX lawyers categorize these transactions as “fraudulent transfers” and maintain that Zhao and other executives are obligated to repay the funds. The documents suggest that the FTX coins held by Binance and the exchanged cryptocurrencies were subject to securities registration. The court is expected to decide whether the claims can be extended beyond American bankruptcy laws.

Zhao’s Jurisdiction Challenge

In Zhao’s legal filing, he emphasizes his residence in the United Arab Emirates, stating that the Delaware court does not have jurisdiction over him. The lawsuit contends that the plaintiffs improperly seek to extend bankruptcy laws to foreign activities, stating, “The fraudulent transfer claims request an unjust extension of bankruptcy laws beyond U.S. borders.”

It is further argued that the transactions in question are cross-border in nature and that the relevant American laws do not possess transnational reach. In a related jurisdiction challenge, Samuel Wenjun Lim and Dinghua Xiao argued in July that the claims were unconstitutional.