Binance CEO Changpeng Zhao Faces Class-Action Lawsuit Over Alleged Role in FTX’s Collapse

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By BitcoinWiki News

Key Takeaways:

– Binance CEO Changpeng Zhao and Binance.US are facing a class-action lawsuit filed by a California resident Nir Lahav
– The lawsuit accuses them of causing the downfall of rival exchange FTX and violating federal and California laws related to unfair competition and monopolizing the cryptocurrency market
– The lawsuit claims that Changpeng Zhao’s tweets had a significant impact on FTX’s fate
– Binance’s decision to liquidate its holdings in the FTX utility token FTT and the announcement of intent to acquire FTX, followed by its withdrawal, are highlighted in the lawsuit
– The lawsuit alleges that Changpeng Zhao’s actions, especially his Twitter posts, played a role in the collapse of FTX
– The lawsuit argues that Changpeng Zhao’s tweet about liquidating remaining FTT holdings was false and misleading
– The lawsuit interprets Changpeng Zhao’s tweet about not supporting people who lobby against other industry players as indicating opposition to FTX CEO’s regulatory efforts
– The lawsuit seeks monetary damages, court costs, and disgorgement of ill-gotten gains
– There could be thousands of members in the proposed class-action lawsuit
– Binance is currently under regulatory scrutiny from the U.S. Securities and Exchange Commission that could impact its future


Title: Binance CEO Faces Class-Action Lawsuit Alleging Role in Rival Exchange’s Downfall

Introduction:
Binance CEO Changpeng Zhao (CZ) and Binance.US are being sued by a California resident, Nir Lahav, in a class-action lawsuit. The lawsuit accuses them of causing the downfall of rival exchange FTX and violating federal and California laws related to unfair competition and monopolizing the cryptocurrency market. The lawsuit claims that CZ’s tweets had a significant impact on FTX’s fate, leading to its collapse.

Lawsuit Claims CZ’s Tweets Harm FTX:
The lawsuit refers to a series of tweets made by CZ in early November, just before FTX’s dramatic collapse. CZ’s tweets are alleged to have played a pivotal role in the rushed and unprecedented collapse of FTX Entities. On November 6, CZ revealed Binance’s decision to liquidate its holdings in FTX’s utility token called FTT, causing shockwaves in the crypto community. The plaintiffs estimate that Binance held up to 5% of all FTT tokens. The following day, CZ announced Binance’s intent to acquire FTX but retracted the commitment a day later. The lawsuit claims that CZ’s announcement and subsequent withdrawal were intended to harm FTX.

Contested Points in the Lawsuit:
One of the key points of contention in the lawsuit is CZ’s November 6 tweet. In the tweet, CZ stated that Binance would liquidate any remaining FTT on its books. However, the plaintiffs argue that this statement was false and misleading since Binance had already divested its FTT holdings. They claim that this tweet was intended to drive down the price of FTT in the market. The lawsuit also points to another statement in CZ’s tweet, where he mentioned not supporting people who lobby against other industry players behind their backs. The plaintiffs interpret this as an indication that Binance opposed FTX CEO Sam Bankman-Fried’s regulatory efforts.

Proposed Class-Action and Damages Sought:
The lawsuit seeks monetary damages, court costs, and the disgorgement of ill-gotten gains based on seven counts. The plaintiff believes there could be thousands of members in the proposed class. It remains to be seen how many individuals will ultimately join the class-action.

Regulatory Scrutiny and Future Implications:
This class-action lawsuit comes at a time when Binance is already facing regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC). The SEC’s investigation could potentially have significant consequences for CZ’s crypto empire. The outcome of the lawsuit and the SEC’s investigation will determine the future of Binance’s operations and CZ’s influence in the cryptocurrency market.

Summary:
Binance CEO Changpeng Zhao and Binance.US are facing a class-action lawsuit filed by a California resident Nir Lahav for their alleged role in causing the downfall of rival exchange FTX. The lawsuit accuses CZ of violating federal and California law related to unfair competition and attempts to monopolize the cryptocurrency market. CZ’s tweets, particularly his announcement and subsequent withdrawal of intent to acquire FTX, are claimed to have harmed FTX. The lawsuit also contests CZ’s misleading tweet about liquidating FTT holdings and interprets another tweet as opposing FTX CEO’s regulatory efforts. The lawsuit seeks monetary damages, court costs, and disgorgement of ill-gotten gains. Binance’s regulatory scrutiny by the SEC adds further significance to the lawsuit’s potential impact on CZ’s crypto empire.

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