- A California resident named Nir Lahav has filed a class-action lawsuit against Binance and its CEO, CZ.
- Lawsuit claims Binance and CZ violated laws by harming competitor FTX in an alleged crypto market monopoly attempt.
Changpeng Zhao (CZ), CEO of the largest cryptocurrency exchange, Binance, and its U.S. subsidiary, Binance.US, find themselves at the center of a class-action lawsuit filed by California resident Nir Lahav. The lawsuit, which was filed on October 2 in the District Court of Northern California, alleges various violations of federal and California laws related to unfair competition and an attempt to monopolize the cryptocurrency market.
The lawsuit stems from a series of tweets made by Changpeng Zhao in early November, just before the dramatic downfall of rival exchange FTX. Further, the plaintiff claims that these had a huge impact on FTX’s fate.
On November 6, Zhao revealed Binance’s decision to liquidate its holdings in the FTX utility token, FTT. That causing shockwaves in the crypto community. Binance owned up to 5% of all FTT tokens, valued at roughly $2.1 billion USD equivalent in cash.
The day after, CZ posted a new tweet declaring Binance’s plan to purchase FTX, only to withdraw that pledge within 24 hours. Yet, the lawsuit asserts that Binance and Zhao intentionally made this announcement and subsequent withdrawal with the intent to harm FTX and its interests.
The core argument put forth in the lawsuit is that Changpeng Zhao’s actions, particularly his Twitter posts, played a pivotal role in what is described as the “rushed and unprecedented collapse of FTX entities.”
The lawsuit further asserts that these actions were intentionally misleading and intended to cause the price of FTT in the market to decline. The cryptocurrency plummeted from $24.6 to $2.2 range.
