Lawsuits are raining down for Binance as the cryptocurrency exchange has been embroiled in a new class action lawsuit seeking $1 billion in damages.
According to a Fortune report, law firm Moscowitz and Boies Schiller Flexner have filed a class-action lawsuit against Binance, its CEO Changpeng “CZ” Zhao, and three crypto influencers — basketball star Jimmy Butler, Graham Stephan, and Ben Armstrong” Bitboy.
Binance accused of listing unregistered securities
According to the report, Binance listed unregistered securities as cryptocurrencies and paid social media influencers to promote these assets. The law firms claim they investigated the crypto exchange for over a year before filing the lawsuit.
One of the cryptocurrencies considered unregistered collateral in the case is the Binance token BNB. The filing argued that the BNB burning program makes the asset an unregistered security because it reduces the coin’s supply to increase its value.
The lawsuit is being filed on behalf of three plaintiffs — two Florida residents and one Californian — who said they lost money trading digital assets promoted by Binance and the influencers. The complaints suggest the case could have millions of people entitled to damages.
Adam Moskowitz of the Moskowitz Law Firm reportedly said of the case:
“The law clearly states that if an influencer promotes an unregistered security and has a financial interest in it, the influencer can be liable to whoever bought the assets. The exchange that facilitates trading would also be liable.”
Binance had not yet responded to BeInCrypto’s request at the time of writing this article.
Meanwhile, this isn’t the first time the law firm has filed a class action lawsuit against a crypto firm. Moskowitz filed a similar lawsuit against bankrupt crypto exchange FTX and its promoters including Thomas Brady, Kevin O’Leary and others. The firm also filed another case against bankrupt crypto lender Voyager, alleging that its Earn program account constituted the sale of unregistered securities.
Increasing legal troubles at Binance
The timing of this lawsuit puts further legal pressure on Binance. The Commodities Futures Trading Commission (CFTC) recently sued the exchange and CZ for violating derivatives trading laws.
There are also reports that the US Department of Justice is investigating the exchange and its founder.
Meanwhile, Binance said it would work with regulators and has enjoyed support from the broader crypto community. The exchange is the largest crypto exchange by trading volume, controlling over 70% of the market according to BeInCrypto data.
Binance trading volume (Source: BeInCrypto)
Disclaimer
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