Judge lets FTX recovery trust chase Binance for $1.76 billion over a 2021 share buyback
The FTX Recovery Trust can continue seeking to claw back at least $1.76 billion allegedly transferred to Binance parties in a 2021 share repurchase. On July 24, U.S. Bankruptcy Judge Karen B. Owens allowed the core fraudulent-transfer claims to proceed against Binance Holdings Limited, Digital Anchor Holdings Limited, Binance Holdings (IE) Limited, Binance (Services) Holdings Limited, and Changpeng Zhao, while dismissing those claims against Xiao and Lim. The court also dismissed separate claims for injurious falsehood, fraud, intentional misrepresentation, and unjust enrichment, applying in pari delicto and rejecting the sole-actor exception. The ruling found bankruptcy jurisdiction, a plausible basis for personal jurisdiction, and no basis at the pleading stage to apply arbitration or the section 546(e) safe harbor. No liability or recovery has been established yet; the trust still must prove its claims and obtain and collect on a judgment or settlement.
