Class Action Lawsuit Targets Binance and Influencers
The Moscowitz Law Firm and Boies Schiller Flexner have jointly filed a lawsuit against Binance, its CEO Changpeng ‘CZ’ Zhao, and three well-known crypto influencers—NBA star Jimmy Butler, YouTuber Graham Stephan, and Ben Armstrong, also known as ‘BitBoy.’ The litigation comes after an extensive investigation into the exchange’s practices by both law firms.
Allegations of Unregistered Securities Listings
Binance is accused of listing unregistered securities disguised as cryptocurrencies and enlisting the help of social media influencers to promote these assets. The Binance token BNB is among the cryptocurrencies identified as unregistered securities in the lawsuit. The plaintiffs argue that BNB’s burn program, which reduces the coin’s supply to increase its value, classifies the asset as an unregistered security.
Millions Potentially Eligible for Damages
Three individuals—two Floridians and a Californian—have filed the lawsuit, claiming they lost money trading digital assets promoted by Binance and its influencers. The scope of the case could potentially encompass millions of individuals seeking damages.
Exchange and Influencers Liable, Says Law Firm
Adam Moskowitz of Moskowitz Law Firm emphasized the legal implications for both the exchange and the influencers involved, stating that influencers who promote unregistered securities while having a financial interest in doing so can be held liable, as can the exchange that facilitates the trades.
A History of Legal Actions against Crypto Firms
This is not the first time Moskowitz Law Firm has taken legal action against a cryptocurrency company. The firm has previously filed class action lawsuits against now-bankrupt crypto exchange FTX and its promoters, as well as against the bankrupt crypto lender Voyager, alleging that its Earn Program account constituted the sale of unregistered securities.
Binance’s Legal Woes Deepen
The new lawsuit adds to Binance’s growing list of legal challenges. The Commodity Futures Trading Commission (CFTC) recently sued the exchange and its CEO for allegedly violating derivative trading laws. Additionally, reports suggest that the US Department of Justice is investigating both the exchange and its founder.
Binance to Cooperate with Regulators
Binance has pledged to cooperate with regulators and has received support from the wider crypto community as it faces these mounting legal issues.
What is the lawsuit against Binance about?
The class action lawsuit accuses Binance of listing unregistered securities as cryptocurrencies and paying social media influencers to promote these assets. It seeks $1 billion in damages.
Who are the influencers involved in the case?
NBA star Jimmy Butler, YouTuber Graham Stephan, and Ben Armstrong, also known as ‘BitBoy,’ are the three influencers named in the lawsuit.
How has Binance responded to the lawsuit?
Binance has committed to cooperating with regulators and has received support from the broader crypto community.