Woofun AI reports that Judge Owens has authorized the FTX Recovery Trust to continue legal action against Binance and its founder, Zhao, regarding a 2021 share repurchase transaction. This ruling allows the trust to seek recovery of assets allegedly transferred during the period leading up to the exchange's collapse.

The core of the lawsuit involves $1.76 billion in alleged fraudulent transfers. The trust targets multiple entities, including Binance Holdings Limited, Binance Capital Management Co. Ltd. (now Digital Anchor Holdings Limited), Binance Holdings (IE) Limited, and Binance (Services) Holdings Limited. Counts I through V assert both constructive and actual fraudulent transfers, seeking the return of property or its equivalent value. Per Woofun AI, these specific claims remain active against the named Binance entities and Zhao.

Conversely, the court dismissed Counts VI through IX against defendants Xiao and Lim. These counts covered injurious falsehood, fraud, intentional misrepresentation, and unjust enrichment related to statements surrounding FTX's failure. The judge applied the doctrine, rejecting the plaintiffs' asserted exception under the sole-actor rule, and made only limited pleading-stage determinations regarding falsity and causation without deciding ultimate liability.

Procedurally, the court affirmed bankruptcy subject-matter jurisdiction and accepted an initial showing of personal jurisdiction over the four Binance entities and Zhao. While a domestic transfer was plausibly alleged, broader extraterritoriality questions remain open. Owens deferred final choice-of-law decisions, declined to compel arbitration, and rejected dismissal under Bankruptcy Code section 546(e) safe harbor due to insufficient pleadings.

This decision preserves a significant recovery avenue for creditors but does not guarantee asset return. The trust must still prove fraudulent-transfer claims, overcome defenses, and secure a judgment or settlement. Only successful execution of these steps will add value to the bankruptcy estate.