The cryptocurrency sector is still experiencing repercussions from the FTX downfall. In a legal document filed in Delaware on May 16, Binance and its related entities requested to have the lawsuit filed against them by the bankruptcy lawyers of FTX dismissed. Binance claimed that the court lacked jurisdiction and asserted that FTX alone was accountable for its downfall.
The lawsuit, launched by the FTX Recovery Trust, is targeting the recovery of $1.76 billion in assets that FTX paid in July 2021 to buy back equity from Binance. At that time, Binance was among FTX’s largest investors, but it later decided to divest from the exchange. In its legal submission, Binance contended that these funds should be safeguarded in bankruptcy under the “safe harbor” provision, as the transaction was related to a securities contract.