Binance Holdings and its former chief executive Changpeng Zhao have subpoenaed Kevin O’Leary, the author Michael Lewis, former Forbes digital assets research director Steven Ehrlich and the accounting firm BDO USA for records in the FTX Binance lawsuit, the $1.76 billion clawback case brought by the FTX Recovery Trust. A notice of the subpoenas was filed on Wednesday 4 November in the US Bankruptcy Court for the District of Delaware, and the subpoenas themselves were served the week before, Bloomberg Law reported on 5 November.
None of the four is being sued. A subpoena orders someone who holds information to hand over documents or testify. It is not an accusation, and it does not make O’Leary, Lewis, Ehrlich or BDO parties to the case. Headlines saying Binance “pulled” them into the lawsuit go further than the filing does.
The text of the notice is not public for free. The court docket, as mirrored by CourtListener, shows a notice of service filed at 2:43 pm Eastern time on 4 November (entry 273), then five certificates of service on 5 November, but the documents themselves sit behind PACER, the courts’ paid system. What follows on the subpoenas comes from Bloomberg Law and outlets that relied on it. The history of the case comes from the court’s 31-page opinion of 24 July 2026 and from the docket.
What the Binance subpoenas ask for, and what is not public
Bloomberg Law describes the requests only as “a host of records and information”. The part of its report that is free to read lists no categories of documents and does not say what is sought from each recipient. No other outlet that covered the filing adds detail on that point.
The subpoenas are a step in discovery, not a finding of liability. Discovery is the phase of a US lawsuit in which each side can force the other, and outsiders, to hand over evidence before a trial. In this case it opened in mid-September: on 14 and 15 September the docket records initial disclosures by both sides, the trust’s first requests for documents from the three Binance Holdings companies, Digital Anchor and Zhao, and Binance’s first request for documents from the trust.
We found no public reaction from O’Leary, Lewis, Ehrlich or BDO USA, and none from Binance, Zhao or the FTX Recovery Trust. No deadline to comply has been reported, and no recipient has been reported to object or to ask the judge to quash a request.
Four recipients, and no stated reason for any of them
Neither Binance nor Zhao has said publicly why they want these records, and no filing we could read explains it. What is on the record is each recipient’s link to FTX.
Kevin O’Leary, the investor known from the US television show “Shark Tank”, was an FTX investor and a paid spokesperson for the exchange. The month after FTX failed in November 2022, he disclosed a promotion deal worth about $15 million, said he had put about $9.7 million into crypto, and said his FTX equity of more than $1 million had become worthless, Bitcoin.com News recalls.
He also has a public view of the very deal this suit is about. Testifying before the US Senate Banking Committee on 14 December 2022, O’Leary said Binance and FTX were rivals and that “one put the other out of business intentionally”, which he called his “personal opinion”, Fox Business reported. He told senators that Bankman-Fried had told him FTX spent up to $3 billion buying back Binance’s stake. The court documents put the price at about $1.76 billion.
Michael Lewis, the author of “The Big Short”, spent long periods with Sam Bankman-Fried while researching “Going Infinite”, his book on the FTX founder published in October 2023. Steven Ehrlich ran digital assets research at Forbes. BDO USA is an accounting and audit firm. The sources we read do not explain what role Ehrlich or BDO played around FTX, and Coindaro will not guess at it.
What the court has left open are factual questions: whether FTX was insolvent in July 2021, and what Bankman-Fried meant to achieve with the buyback. Records from people who watched FTX closely at the time could bear on both, but Binance has not said that is its aim.
The FTX Binance lawsuit: a $1.76 billion buyback agreed in July 2021
The FTX Recovery Trust, which collects assets for FTX’s creditors, and FTX Digital Markets, the Bahamas arm of the exchange, filed the suit on 10 November 2024. The defendants are four Binance companies (Binance Holdings Limited, Binance Holdings (IE) Limited, Binance (Services) Holdings Limited and Binance Capital Management, also known as Digital Anchor Holdings), Zhao himself, and two former Binance executives, Samuel Wenjun Lim and Dinghua Xiao. The case is adversary proceeding 24-50222 inside FTX’s Chapter 11 case, 22-11068.
Everything in the next paragraphs is the trust’s version. When a judge rules on a motion to dismiss, the complaint’s allegations are taken as true for that purpose only. They are not findings, and nothing in them has been proven at trial.
According to the complaint, as summarised by the court, Binance and Zhao bought 20% of FTX Trading in 2019 for $18.3 million. When Bankman-Fried built his US business, FTX US, under a separate US parent company, Binance, Zhao, Xiao and Lim took an 18.4% stake in that parent “for just two dollars”, in the opinion’s words.
On 15 July 2021, FTX executives and a newly created Alameda subsidiary, Euclid Way Ltd., agreed in seven contracts to buy those shares back for cryptocurrency worth about $1.76 billion. The trust alleges that Alameda Research, Bankman-Fried’s trading firm, paid for it, and that loan agreements meant to have the FTX buyers repay Alameda were never honoured or meant to be.
Payment came in three tokens: FTT, FTX’s own token, which the trust says was worthless at the time because of FTX’s hidden insolvency; BNB, Binance’s token; and BUSD, Binance’s dollar stablecoin. Before the BUSD could be sent, Paxos had to mint it, after receiving about $721 million in US dollars from Alameda.
The trust says FTX was already insolvent. It points to an internal balance sheet drawn up just before the deal showing Alameda’s net asset value at about minus $2.7 billion, with liabilities of $9.4 billion. It alleges that Caroline Ellison told Bankman-Fried Alameda did not have enough money for the buyback, and that he answered by having Alameda “borrow” about $1 billion of FTX.com customer deposits.
| Item (as alleged in the complaint) | Figure | Date |
|---|---|---|
| Binance and Zhao stake in FTX Trading | 20% for $18.3 million | 2019 |
| Stake in the parent of FTX US | 18.4% for two dollars | After 2019 (date not given) |
| Buyback price, paid in FTT, BNB and BUSD | About $1.76 billion | 15 July 2021 |
| US dollars sent by Alameda to mint the BUSD | About $721 million | For the buyback |
| Alameda net asset value just before the deal | About minus $2.7 billion | July 2021 |
| Alameda liabilities on that balance sheet | $9.4 billion | July 2021 |
| Customer deposits allegedly used | About $1 billion | For the buyback |
The suit also went after Binance’s posts on X, then Twitter, in November 2022. On 6 November Zhao said Binance would sell all its FTT; on 8 November he announced a non-binding letter of intent to buy FTX; on 9 November Binance pulled out. FTX filed for bankruptcy in the United States on 11 November 2022. The trust argued that those posts helped destroy the exchange and sought damages for them.
What Judge Owens decided on 24 July 2026
Chief Judge Karen B. Owens ruled on the defendants’ motions to dismiss in an opinion and order dated 24 July 2026. The order itself is three numbered paragraphs.
- The fraudulent transfer claims (counts I to V) were dismissed against Lim and Xiao. The court found it had no personal jurisdiction over them for those claims, noting that the complaint did not allege either man got any benefit from the buyback.
- The claims over the November 2022 posts (counts VI to IX) were dismissed against Binance and Zhao.
- Everything else was denied, so the claims to recover the $1.76 billion go on against the four Binance companies and Zhao.
The posts claims fell on a doctrine called in pari delicto, which stops a wrongdoer from suing over harm tied to its own misconduct. Bankman-Fried’s fraud is imputed to FTX, the court held, and FTX’s own complaint describes an insolvency dating back to at least July 2021. The judge put it bluntly: FTX “was a ship sinking from a gigantic hole (a $9 billion one) caused by its own fraud”.
The same opinion adds a point that matters for fairness: “Binance and CZ are not accused of participating in the FTX fraudulent scheme”. The surviving claims do not say Binance took part in FTX’s fraud. They say the money Binance received in 2021 came from an insolvent company and can be clawed back for its creditors.
On the other arguments, Binance lost at this stage. The judge found the court has jurisdiction over Binance and Zhao, treating the Binance companies as a common enterprise owned and controlled by Zhao. She refused to send the clawback claims to arbitration: the trust brings them under the Bankruptcy Code on behalf of creditors, so it is not bound by the arbitration clause in the buyback contracts. She also rejected, for now, the argument that the deal happened abroad. Alameda Research LLC is a Delaware company, and Binance’s 2023 plea papers state that a third-party US company hosted the Binance.com website and ran the platform from the United States. Whether later evidence supports the same conclusion “remains unknown”, she wrote.
Bloomberg Law reported the ruling on 27 July, which is why some outlets give that date. The opinion itself is dated 24 July.
Binance’s defence, and its appeals against the July ruling
Binance and Zhao deny wrongdoing in this suit. In their motions, as the opinion recites them, the Binance companies argued that a US court had no jurisdiction over foreign firms with no US contacts, that US bankruptcy law cannot reach a deal struck abroad, and that the buyback contracts sent any dispute to arbitration. They also told the court the buyback was a legitimate “business divorce”, Zhao’s way of separating from Bankman-Fried after a widely reported feud. The judge did not accept or reject that account: “Defendants present a question of fact that cannot be resolved now,” she wrote.
They are also trying to get the ruling overturned. The docket shows Digital Anchor filing a notice of appeal on 7 August, over arbitration, and asking for a stay pending that appeal. On 24 August Zhao asked Judge Owens to reconsider, and the three Binance Holdings companies joined; the trust objected on 22 September. On 28 August Zhao and the Binance Holdings companies filed notices of appeal and asked the district court for leave to appeal, and the companies asked for a stay, which Zhao joined.
We found no ruling on those requests in the docket entries we could read. An entry dated 30 October and tagged “Reconsider” is not in the free archive, so we cannot say what it contains. The case has not stopped in the meantime: the Binance companies and Zhao filed answers to the complaint on 11 September, and the judge signed a supplemental case management plan and scheduling order on 14 September.
One part of the background is not in dispute. In 2023 Binance and Zhao pleaded guilty in federal court in Seattle to charges that included anti-money laundering violations, running an unlicensed money transmitting business and sanctions violations. Those pleas are a separate matter and prove nothing about the 2021 buyback; the opinion relies on them for the questions of US contacts and jurisdiction.
What a subpoena can and cannot do in a US bankruptcy case
Bankruptcy Rule 9016 says that Rule 45 of the Federal Rules of Civil Procedure applies in a bankruptcy case. Under Rule 45, a subpoena can order someone outside the case to produce documents, electronically stored information or tangible things, or to testify. When it asks for documents, a notice and a copy must be served on each party before the subpoena is served, which is why a notice of subpoenas appears on the docket.
The person who receives one is not accused of anything. They can comply, or serve written objections, which Rule 45 requires before the time set for compliance or within 14 days of service, whichever comes first. They can also ask the court to quash or modify it, and the court must do so if the subpoena demands privileged material or imposes an undue burden.
What comes out of discovery is evidence, not a verdict. Documents from the four recipients could matter to the open questions, such as how FTX’s finances looked in mid-2021, or they could turn out to be marginal. Until the requests or the answers are filed publicly, nobody outside the case knows.
What it means for FTX creditors and Binance users
Any money the trust recovers from Binance goes into the blockchain that runs exactly as written when it is called, holding and moving funds according to its code, without an intermediary able to change the outcome.">smart contract holding reserves of two or more tokens, supplied by users, that a decentralized exchange uses to execute trades automatically at a price set by a formula.">pool it uses to pay FTX’s creditors, wherever they live, so customers in Europe and elsewhere have a stake in the result even though the case is fought in Delaware. The trust runs other recovery suits on the same logic, including a $1.15 billion claim against Genesis Digital Assets and its affiliates, according to Bitcoin.com News.
For people who trade on Binance today, the case changes nothing in how the exchange works. It concerns a 2021 transaction between the companies, not customer accounts. Our Binance review covers the platform itself, and our guide to how a centralized exchange holds customer funds, and what FTX showed about it explains why mixing customer deposits with a trading firm’s money sits at the heart of this case.
In October Coindaro reported on another case of the same kind, the Prime Trust clawback suit in which the Poloniex operator was hit with a $9 million default judgment.
What is still unknown, and the next dates
No trial date appears in any source we read, and no deadline for the four recipients has been reported. The docket entries for the answers filed on 11 September list a mediation due date of 11 January 2027, the next date on the public record. Whether the district court will hear the appeals, and whether the case is paused while it decides, is not known.
The other open points are the content of the requests and whether any recipient objects. Further out are the questions the July opinion left for evidence: whether FTX and Alameda were insolvent on 15 July 2021, what Bankman-Fried intended, and whether the transfer counts as domestic once the facts are developed. Until a court decides those, the trust’s claims remain allegations, and Binance and Zhao are presumed not liable.