CZ Seeks Dismissal from $1.8B FTX Lawsuit Over Jurisdiction
Binance co-founder CZ argues U.S. court lacks jurisdiction in FTX’s $1.8B trust lawsuit due to his UAE residency.
- CZ files to dismiss $1.8B FTX lawsuit citing jurisdiction issues
- Argues U.S. bankruptcy laws don’t apply extraterritorially
- CZ resides in the UAE, challenging U.S. court’s authority
CZ Pushes Back Against FTX Lawsuit
Binance co-founder Changpeng Zhao (CZ) has requested the dismissal of a $1.8 billion lawsuit filed by the FTX bankruptcy estate. According to a Bloomberg report, CZ is challenging the jurisdiction of the U.S. bankruptcy court overseeing the case, arguing that the claims have no reach beyond American borders.
CZ’s legal team claims that because he resides in the United Arab Emirates (UAE), the U.S. court does not have the authority to pursue the matter. This motion comes as part of the broader legal battle between FTX’s liquidators and Binance, stemming from the collapse of the Sam Bankman-Fried-led crypto exchange in 2022.
Jurisdiction and Legal Reach at the Core
At the heart of CZ’s dismissal request is the principle of extraterritoriality—whether U.S. law can apply to actions and individuals outside its borders. His lawyers argue that the trust-related claims made by FTX’s bankruptcy estate do not extend to foreign nationals living abroad.
This defense could significantly impact the case’s outcome, especially as it centers on whether Binance and CZ had a role in FTX’s downfall. The lawsuit claims that CZ’s public comments contributed to a liquidity crisis at FTX, but his team maintains the U.S. court has no jurisdiction over him due to his non-resident status.
Implications for Crypto Legal Precedents
If CZ’s dismissal motion is granted, it could set a precedent for how U.S. courts handle international figures in crypto-related bankruptcies. The case raises important questions about cross-border legal enforcement in a decentralized, globalized crypto ecosystem.
With regulators increasingly targeting offshore actors, the outcome of CZ’s request could influence future lawsuits involving global crypto leaders and platforms operating beyond U.S. soil.
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