The world’s popular cryptocurrency exchange, Binance, seeks to dismiss the FTX $1.76 billion Asset recovery lawsuit, calling it a legally untenable case.
Binance Seeks to Dismiss FTX’ $ 1.76 Recovery Lawsuit
The Crypto exchange filed a case on May 16th at the Delaware Bankruptcy Court against the FXT estate. The claim that the Cryptocurrency exchange was responsible for its collapse, regardless of its reputation worldwide. The Binance legal team sees this as a legally”untenable case.” The team denies being a part of FXT’s sudden collapse
According to Binance, the collapse was a result of fraudulent acts which was ongoing within FXT itself. Additionally, it emphasized that FXT is a non-US entity outside the jurisdiction of the Delaware Bankruptcy Court.
FXT Drags Binance back to Payment made in 2021
Furthermore, the FXT estate drags Binance back to cryptocurrency payments that it has made since 2021 as part of the equity buyback. Nevertheless, Binance rejects the claim made against it, stating that “FTX remained an active concern for 16 good months”. A total of 16 months after the share repurchase, and there was “no plausible claim” because during that period, the exchange was insolvent.
Zhao’s tweet: How does it relate to the FXT crash
The asset recovery lawsuit is also pointing to Zhao, the former Binance CEO of triggering a collapse through a tweet on Nov. 6, 2022. The tweet was announcing of the liquidation of FXT tokens. Binance argues that Zhao’s tweet was in reference of public concerns that were already known.
“Binance’s decision to liquidate its remaining FTT was, in fact, due to recent revelations— in particular, Nov. 2, 2022, article from CoinDesk”. The article brought Alameda Research’s balance sheet to light.
FXT Set to Repay Creditors
FXT is set to repay creditors in this second round, after filing for bankruptcy more than two years ago. According to details from May 15th, the FXT estate publicly announced a $5 billion distribution from May 30th via Bitgo and Kraken. It targets those in the second eligible group under the crypto exchange’s reorganization. From the plan, a five-creditor group called the “convenience classes” will receive approximately 54% and 120% of their made claims. This sums up to a $16 billion repayment, which depends on the final number of qualified claims.
