A federal judge has allowed the FTX Recovery Trust to move forward with its claim against Binance over a $1.76 billion share buyback dating back to 2021, keeping one of the largest disputes tied to the FTX estate alive at the pleading stage.

Court's Ruling on the Motion to Dismiss

The decision was issued in a ruling on motions to dismiss in the FTX bankruptcy litigation, which permitted the recovery trust's action against Binance to proceed, according to the court's opinion and order.

This ruling represents a procedural step, not a final determination on the merits. The trust has cleared the initial legal threshold to continue litigating, but the court has not found Binance liable for any wrongdoing.

The case is docketed as FTX Recovery Trust v. Binance Holdings Limited et al., as reflected in the federal court record.

The 2021 Share Buyback Dispute

At the center of the claim is a $1.76 billion transaction from 2021 in in which FTX repurchased equity that Binance had held in the exchange — a deal the FTX Recovery Trust is now seeking to challenge under bankruptcy avoidance provisions designed to let trustees recover value transferred out of an estate before or during insolvency. Recovery actions of this nature generally aim to claw back value for a bankrupt estate so that recovered funds can be redistributed to creditors. The buyback itself constitutes the core factual issue the trust must ultimately prove.

The FTX estate has pursued a series of recovery efforts since the exchange's November 2022 collapse, targeting transfers to executives, affiliated entities, and outside counterparties as part of a broader plan to maximize distributions to creditors and customers. This claim adds a major exchange counterparty to that list. It sits alongside other high-stakes crypto insolvency disputes, including a separate courtroom battle over ownership of nearly 40,000 dormant Bitcoin.

Potential Implications for Binance and FTX Creditors

Because the claim remains active, the outcome could eventually feed back into creditor recoveries if the trust succeeds in reclaiming any portion of the disputed amount for the estate. The FTX bankruptcy proceedings have progressed through phases of asset recovery and claims resolution, with the estate previously outlining plans for interim distributions to customers.

The dispute underscores that large crypto counterparties can face follow-on litigation over pre-collapse deals long after a transaction has closed. Binance continues to operate globally, having recently regained website access in the Philippines through a regulatory sandbox, even as this legacy claim proceeds.

The next stages of the case will play out in the Delaware bankruptcy court, whose docket and opinions are tracked in the FTX case administration records. No decision on liability has been reached.