Binance Subpoenas Kevin O’Leary and Michael Lewis in $1.76B FTX Lawsuit
Binance seeks evidence from high-profile figures to defend against FTX's massive clawback litigation.
1Legal Strategy Expansion
Binance and its founder Changpeng Zhao have issued subpoenas to investor Kevin O’Leary and author Michael Lewis. This move is part of their defense against a $1.76 billion clawback lawsuit filed by the FTX estate. The legal action aims to recover funds allegedly paid while the exchange was insolvent.
2Scope of Subpoenas
The requests for records also target the accounting firm BDO USA PC and former Forbes staffer Steven Ehrlich. These parties are being asked to provide information relevant to the disputed share repurchase agreement from July 2021. The court notice was filed in the U.S. Bankruptcy Court for the District of Delaware.
3Disputed Share Repurchase
The core of the lawsuit involves a 2021 transaction where FTX repurchased shares from Binance. The estate alleges that Alameda Research funded this deal using misappropriated customer money while FTX was already insolvent. The payment was executed using FTT tokens, BNB tokens, and the BUSD stablecoin, totaling approximately $1.76 billion.
4O’Leary’s FTX Involvement
Kevin O’Leary served as a paid spokesperson for FTX and was also an investor in the exchange. He previously disclosed a promotional agreement worth $15 million and reported personal crypto holdings of $9.7 million. Additionally, he held over $1 million in equity that became worthless following the company's sudden collapse.
5Lewis and SBF Access
Author Michael Lewis gained extensive access to Sam Bankman-Fried while researching his book, Going Infinite. His work documented the rise and fall of the FTX co-founder through personal interviews and observations. Binance is likely seeking information from Lewis that could clarify the financial state of the exchange during that period.
6Judicial Ruling Context
Chief U.S. Bankruptcy Judge Karen B. Owens allowed the recovery claims against Binance and Zhao to proceed in July 2026. While she dismissed fraudulent-transfer counts against former Binance executives Samuel Wenjun Lim and Dinghua Xiao, the primary allegations against Zhao and four Binance entities remain active in the ongoing legal battle.
7Broader Recovery Efforts
The FTX Recovery Trust is actively pursuing multiple clawback actions to replenish funds for creditors. Beyond the Binance case, the trust filed a $1.15 billion lawsuit against Genesis Digital Assets. These efforts are designed to return assets to the estate for administration and eventual distribution to the exchange's former customers.
8Implications for Creditors
The outcome of this litigation directly impacts the total assets available for creditor distribution. With FTX Trading Ltd. initiating a $900 million payout to creditors starting July 31, 2026, the success of these clawback lawsuits remains a critical factor in the final resolution of the bankruptcy proceedings and total recovery amounts.