Californian Resident Files Class Action Lawsuit Against Binance and Its CEO Over Alleged Role in FTX Implosion
A California resident has filed a class-action lawsuit against top crypto exchange Binance and the company’s CEO, Changpeng Zhao, for allegedly attempting to monopolize the crypto platform market by hurting FTX.
Nir Lahav says in his new lawsuit that he lost crypto when FTX collapsed last November.
His lawyers claim that Binance and Zhao were unhappy with former FTX CEO Sam Bankman Fried’s “regulatory efforts” in the US.
The lawyers call attention to Zhao’s tweet on November 6th, when he announced Binance’s plan to liquidate their holdings of FTX’s native token, FTT, due to “recent revelations.”
Argue Lahav’s lawyers,
“Zhao’s tweet caused the price of FTT to decline 14% over a 24-hour period. Zhao tweeted ‘We are not against anyone.’ But in the same post he added: ‘But we won’t support people who lobby against other industry players behind their backs.’ On Tuesday, November 7, 2022, Zhao tweeted, ‘There is a significant liquidity crunch. To protect users, we signed a non-binding [letter of intent], intending to fully acquire FTX.com.’”
Lahav’s lawyers note, however, that Binance pulled back from the deal the following day, after it appeared they were “armed with confidential information from FTX Entities.”
“Zhao publicly disseminated this information on Twitter and other social media platforms to hurt FTX Entities that ultimately lead to a rushed and unprecedented collapse of FTX Entities. FTX Entities and its Board of Directors were unable to avoid this collapse in the market before FTX Entities’ bankruptcy filings. Zhao showed no qualms about publicly tweeting to hurt FTX Entities.”
Lahav claims Binance practiced unfair competition and violated laws regulated by the U.S. Securities and Exchange Commission (SEC).
Bankman-Fried has been charged with defrauding investors and mishandling billions of dollars worth of customer funds related to the FTX’s implosion last year. If convicted, he faces decades behind bars.
The SEC sued Binance, Zhao and Binance.US in June, alleging that the firms were violating securities laws.
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Author: Conor Devitt
