Binance.US and Changpeng Zhao Face Class-Action Lawsuit Over FTX Collapse
Binance.US and its founder Changpeng Zhao, also known as CZ, are being sued in a class-action lawsuit that accuses them of unfair competition related to the collapse of cryptocurrency exchange FTX. The lawsuit revolves around tweets made by Zhao in early November, which coincided with Binance’s decision to liquidate its holdings of FTX utility tokens (FTT). In one of these tweets, Zhao hinted at Binance’s intent to acquire FTX but later reversed the decision.
The lawsuit alleges that Zhao’s public dissemination of information on Twitter and other social media platforms about the withdrawal of the acquisition offer was intended to harm FTX entities and led to their collapse.
Binance Had Already Sold FTT
The legal complaint claims that Zhao’s tweet on November 6, stating that Binance had decided to liquidate any remaining FTT on its books, was false and misleading. The lawsuit argues that Binance had already sold approximately $530 million worth of FTT before the tweet. As a result of Zhao’s post, the price of FTT declined by 14% over 24 hours, leading to significant financial losses for FTX entities.
Zhao Defends Binance
The lawsuit highlights regulatory differences between Binance and FTX. Zhao’s tweet included a comment suggesting a disagreement with FTX CEO Sam Bankman-Fried’s advocacy for regulatory efforts in the crypto sector. The plaintiffs argue that Zhao’s actions were part of a broader strategy to undermine FTX.
Zhao To Blame For FTX Downfall
Speculation within the cryptocurrency community points to Zhao’s tweet as the cause of the downfall of FTX and Alameda Research. Both Zhao and Bankman-Fried have engaged in a heated exchange on Twitter. Their exchanges are under investigation by the U.S. Securities and Exchange Commission for alleged violations of federal securities laws.
Hot Take: Binance.US Faces Class-Action Lawsuit Over Alleged Unfair Competition
Binance.US and its founder Changpeng Zhao are being sued in a class-action lawsuit that accuses them of unfair competition in connection with the collapse of cryptocurrency exchange FTX. The lawsuit claims that tweets made by Zhao were intended to harm FTX entities and led to their collapse. Additionally, the lawsuit alleges that Zhao’s tweet about liquidating FTT was false and misleading, causing significant financial losses for FTX entities. This ongoing legal battle highlights regulatory differences between Binance and FTX, as well as the potential impact of social media posts on the cryptocurrency market.
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