FTX Trust Can Pursue $1.76B From Binance Over 2021 Buyback

The judge also dismissed Counts VI through IX for injurious falsehood, fraud, intentional misrepresentation and unjust enrichment over statements linked to FTX's collapse. The court applied the in pari delicto doctrine, which bars a plaintiff from recovering for its own wrongdoing, and rejected the plaintiffs' asserted exception under the sole-actor rule. The analysis made only limited pleading-stage determinations about alleged falsity and causation. It did not decide ultimate liability or determine how much the statements contributed to the collapse.

The court found bankruptcy subject-matter jurisdiction and held that the plaintiffs made an initial showing of personal jurisdiction over the four Binance entities and Zhao. It also found that a domestic transfer was plausibly alleged at this stage, while leaving the broader extraterritoriality question open as the record develops.

Owens deferred a final choice-of-law decision. She also declined to compel arbitration and rejected dismissal under the Bankruptcy Code's section 546(e) safe harbor because the defense had not been established on the pleadings.

For creditors, the ruling preserves a potentially large recovery path but creates no recoverable value by itself. The trust must prove its fraudulent-transfer claims, address any defenses that return on a fuller record, obtain a judgment or settlement and collect. Only then could the case add assets to the bankruptcy estate.