Binance and co-founder Changpeng Zhao — widely known as CZ — have subpoenaed Kevin O'Leary and author Michael Lewis as part of the $1.76 billion clawback lawsuit filed by FTX's recovery entities, seeking records connected to the collapsed exchange, its former leadership, and the disputed buyback of Binance's equity stakes.

Bloomberg Law reported on November 5 that the subpoenas were issued in connection with a notice filed on November 4 in the U.S. Bankruptcy Court for the District of Delaware. The requests seek records and information from O'Leary, Lewis, former Forbes Digital Assets Research Director Steven Ehrlich, and the accounting and audit firm BDO USA PC. Subpoenas are a standard discovery tool in U.S. litigation, allowing a party to compel documents or testimony from third parties who are not themselves defendants in a case.

The legal action is being pursued by the FTX Recovery Trust, which manages efforts to recover assets for creditors, together with FTX Digital Markets Ltd. The dispute centers on payments made before FTX entered bankruptcy in November 2022 — a collapse that stands among the largest in the cryptocurrency industry's history.

Why Kevin O'Leary and Michael Lewis Were Subpoenaed

O'Leary had financial and promotional ties to FTX before the exchange collapsed. He was an investor in the company and served as a paid spokesperson. In December 2022, he disclosed that his promotional agreement with FTX was worth approximately $15 million.

O'Leary also said he had invested about $9.7 million in cryptocurrency and held more than $1 million in FTX equity, which he said became worthless after the company's bankruptcy.

Lewis became closely associated with FTX through his reporting on co-founder Sam Bankman-Fried. The author of “The Big Short” spent considerable time with Bankman-Fried while researching “Going Infinite: The Rise and Fall of a New Tycoon,” a book that explored the former executive's business activities and personal life, drawing on the access Lewis had to him before FTX's collapse.

Published in October 2023, nearly a year after FTX filed for bankruptcy, the book and Lewis's accompanying interviews documented Bankman-Fried's rise and the events surrounding the exchange.

FTX Seeks to Recover $1.76 Billion From Binance

The lawsuit was filed in November 2024 and focuses on a share repurchase agreement reached in July 2021. The transaction involved Binance's holdings of a 20% stake in FTX's international business and an 18.4% stake in its U.S. parent company.

According to the plaintiffs, Alameda Research, the trading firm founded by Bankman-Fried — who was later convicted on fraud charges and sentenced in March 2024 to 25 years in prison — financed the buyback while FTX was already insolvent. The payments reportedly involved FTX's FTT token, Binance's BNB token, and BUSD, a dollar-pegged stablecoin.

FTX's recovery entities characterize the transaction as a fraudulent transfer and are seeking to reclaim at least $1.76 billion. Fraudulent-transfer claims are a core tool of U.S. bankruptcy law, allowing an estate to unwind transfers made while a company was insolvent. Binance and Zhao have disputed the allegations and asked the court to dismiss the claims.

The recovery effort is part of a broader set of legal actions pursued on behalf of FTX creditors. The FTX Recovery Trust has also filed a separate $1.15 billion clawback lawsuit against Genesis Digital Assets and its affiliates, alleging that investments funded by Alameda involved misappropriated customer funds.

Court Allows Key Claims Against Binance and Zhao to Continue

Chief U.S. Bankruptcy Judge Karen B. Owens issued an opinion dated July 24 allowing the central recovery claims against Zhao and four Binance entities to proceed.

The judge dismissed fraudulent-transfer claims against former Binance executives Samuel Wenjun Lim and Dinghua Xiao. She also dismissed separate state-law claims brought against the Binance defendants.

However, the remaining allegations seeking repayment from Zhao and the four Binance entities survived the dismissal requests. The court's decision means the $1.76 billion recovery dispute remains unresolved. With the dismissal requests largely resolved, the case's remaining questions — whether the 2021 buyback can be unwound and what records the subpoenas produce — now sit before the Delaware court.

A successful clawback would return the recovered assets to the plaintiffs for distribution through the FTX recovery process. The latest subpoenas seek additional records and information from individuals and organizations connected to FTX, its former leadership, and the disputed transaction.

The underlying report was published by Bloomberg Law and covered via news.bitcoin.com.