UpdatesApr 03, 2023

Binance faces $1 billion lawsuit and legal troubles

The largest cryptocurrency exchange in the world is in serious legal trouble

The old saying goes that the higher you climb, the more they want to bring you down. This is definitely the case with Binance, the world's largest cryptocurrency exchange. The company in question is subject to repeated attacks and constantly has to face numerous lawsuits and obstacles from governments. The latest version of this story has come to light today, as the exchange and the influencers cooperating with it face a fine of 1 billion dollars!

Binance faces $1 billion lawsuit for trading unregistered securities

Binance has been on the legal battlefield for a long time. It has only been less than a week since the company and its CEO, Changpeng Zhao, received a lawsuit from the U.S. Commodity Futures Trading Commission (CFTC). In the indictment filed by US officials against Zhao and his company, serious allegations were made regarding the unclear terms of the products offered and insider trading. Today, CZ and a group of his associates took another hit.

On March 31, law firms Moscowitz and Boies Schiller Flexner filed a lawsuit against the exchange and its influencers. According to the data contained in the lawsuit, they face a financial penalty of a total of $ 1 billion. As stated by the plaintiffs in the filed indictment, Binance is heavily implicated in the case of trading in unregistered securities. What's more, the company paid celebrities to promote their services. The information described above was first provided by Fortune.

"This is a well-known example of a centralized exchange that promotes the sale of unregistered securities," the lawsuit said.

Both law firms filed a similar lawsuit, also against Voyager, the acquisition of which Binance has been seeking for several months. During this process, it was claimed that influencers who took a fee for activities promoting "unregistered securities" led to financial losses incurred by customers of this financial entity.

The same situation is in the case of the lawsuit against the Binance exchange and its media partners, i.e. Jimmy Butler (basketball player of the Miami Heat club) and cryptocurrency Youtubers - Graha Stephan and Ben Armstrong (BitBoy Crypto). The plaintiffs in the lawsuit are now seeking $1 billion from Binance and the influencers as compensation for their financial losses.

“For over a year, we have witnessed Binance selling unregistered financial securities,” the lawsuit said.

There are currently three American plaintiffs in the lawsuit, but the dossier that was sent to the court states that "millions of investors may be eligible for compensation in this case." The law firms mentioned above intend to link more influencers to this case.