Binance CEO & Jimmy Butler Sued for $1B 👨⚖️
Class action lawsuit alleges Binance and crypto influencers promoted unregistered securities, including Binance token BNB, potentially affecting millions of investors.
Binance, one of the world's largest cryptocurrency exchanges, is facing a $1 billion lawsuit over allegations that it promoted unregistered securities. The lawsuit, filed by the Moscowitz Law Firm and Boies Schiller Flexner, accuses Binance of listing securities as cryptocurrencies and paying influencers to promote them. The suit names three crypto influencers, including NBA star Jimmy Butler, and Binance CEO Changpeng ‘CZ’ Zhao as defendants.
The lawsuit claims that Binance's token BNB is one of the unregistered securities that the company promoted. The suit alleges that the BNB burn program, which reduces the coin's supply to increase its value, makes it an unregistered security. The plaintiffs, two Florida residents and a California resident, claim that they lost money while trading digital assets promoted by Binance and the influencers.
The lawsuit could potentially affect millions of investors who traded in the digital assets promoted by Binance and the influencers. The law firms claim they investigated the crypto exchange for over a year before filing the lawsuit. The legal challenge comes at a difficult time for Binance, which is facing regulatory scrutiny from the Commodities Futures Trading Commission (CFTC) and the US Department of Justice.
The CFTC recently sued Binance and CZ for violating derivative trading laws. The lawsuit seeks civil penalties and trading bans against Binance and CZ. Meanwhile, the US Department of Justice is reportedly investigating Binance and its founder for potential money laundering and tax evasion. Despite the legal challenges, Binance has stated that it will cooperate with regulators and has received support from the broader crypto community.
The legal challenges and reputational risks present significant challenges for Binance, which controls over 70% of the market. The lawsuit could also have implications for other cryptocurrency exchanges and influencers, who may face increased scrutiny and legal action for promoting unregistered securities. The case highlights the need for greater regulation and oversight of the cryptocurrency industry to protect investors from potential scams and frauds.
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