An Investor Files Lawsuit Against Binance and CZ Over FTX Collapse
An investor who suffered losses due to the collapse of cryptocurrency exchange FTX has initiated legal proceedings against Binance and its CEO Changpeng ‘CZ’ Zhao, claiming that they are partially responsible for the exchange’s downfall. The investor leading the lawsuit, Nir Lahav, also alleges that CZ’s tweets contributed to the decline of FTX. In the court filing, the plaintiffs accuse Binance and CZ of unfair competition and violations of SEC laws. They claim that CZ’s alarming tweets caused a 14% decrease in the price of FTX’s native token, FTT, within 24 hours.
CZ’s Posts Allegedly Cause Catastrophic Consequences
The lawsuit further claims that CZ disseminated information on Twitter and other platforms with the intention of harming FTX. The filing states that his fearful posts led to an unprecedented collapse of the exchange. It highlights the damage caused by the tweet, resulting in a rapid decline in the price of FTT from $25 to $3 and ultimately leading to FTX’s bankruptcy without sufficient time for necessary safeguards.
The filing also mentions that former FTX CEO Sam Bankman-Fried, who advocated for regulations, was criticized by Binance and CZ for his regulatory efforts. Bankman-Fried is set to face trial this week for alleged fraud, with jury selection on October 3 and the trial commencing on October 4. Despite his requests, the judge has denied his temporary release from prison to better prepare for the case.
Hot Take: Investor Sues Binance and CZ Over FTX Collapse
An investor affected by the collapse of FTX has taken legal action against Binance and its CEO CZ, claiming they are partially responsible for the exchange’s downfall. The lawsuit alleges that CZ’s tweets contributed to a significant decrease in FTX’s token price, leading to its bankruptcy. This case highlights the potential legal consequences of social media influence in the cryptocurrency industry and raises questions about fair competition practices. As the trial unfolds, it will be interesting to see how the court evaluates CZ’s tweets and their impact on FTX. This lawsuit may set a precedent for future cases involving social media and cryptocurrency exchanges.
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