A class action suit has been filed in the U.S. against Binance and its CEO. The plaintiffs accuse the exchange of violating unfair competition laws, claiming that Changpeng Zhao’s actions harmed FTX and led to its collapse.
A class action suit has been filed in the U.S. District Court of Northern California against Binance and its CEO, Changpeng Zhao, as well as Binance’s affiliates BAM Trading and BAM Management US Holdings.
Nir Lahav, a representative of the plaintiff group, alleges that Binance has violated federal and California unfair competition laws. Specifically, the company led by Changpeng Zhao attempted to monopolize the market by harming its competitor, the exchange FTX.
The grounds for the lawsuit were Zhao’s messages on X, ex-Twitter, posted on the eve of FTX’s collapse. The plaintiffs point out that the tweets by Binance CEO were made alongside the sale of native tokens of the FTT exchange. Zhao publicly stated that he had tentatively agreed with Sam Bankman-Fried, CEO of FTX, to buy the crypto exchange. However, the deal was called off the very next day.
According to the lawsuit filed, Zhao purposely spread the information about the canceled deal on social media to hurt FTX, ultimately leading to the crypto exchange’s rapid and unprecedented collapse. The plaintiffs also claim that Zhao’s tweets about the FTT liquidation had only one purpose, namely to lower the asset’s price in the market.
The lawsuit states that Changpeng Zhao and Binance opposed Sam Bankman-Fried’s efforts to regulate the crypto market. As evidence, they cited a November 6 tweet by Binance CEO in which he explicitly says that he won’t support lobbying against other market participants. Finally, the plaintiffs accused Binance and Zhao of failing to give FTX’s management and board of directors the opportunity to protect their customers and end users.
The plaintiffs are seeking damages and legal fees, as well as to oblige the defendants to return all illegally obtained funds.
Changpeng Zhao’s involvement in the collapse of FTX was previously indicated by many indirect facts.
