California-Based Resident Sues Binance.US and CZ for Their Role in FTX’s Downfall

The suit is demanding monetary damages, court costs and the remission of ill-gotten gains based on seven counts.

Binance.US and Binance CEO Changpeng Zhao have both been slammed with a class-action suit. The suit was filed in the District Court of Northern California by a resident of the US state simply identified as Nir Lahav. According to the October 2 filing, Binance.US and Binance CEO played prominent roles in the downfall of its then competitor FTX.

The filing also alleged that, in the course of trying to harm FTX to gain a monopolistic hold on the crypto market, the company violated several federal and California laws.

In view are the posts that Zhao made on X (formerly Twitter) in the hours leading up to FTX collapse last November. Per the filing, Zhao made the posts after consulting with Binance.US and arriving at a decision to liquidate their holdings in the FTX utility token FTT on November 6. By Lahav’s estimations, Binance owned at least 5% of all FTT tokens at the time. Zhao’s post read in part:

“Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books.”

However, Lahav believes that the said post was false and misleading, to say the least. The plaintiff claims that at the time Zhao posted, Binance had already sold its FTT holdings, and the post was only “intended to cause the price of FTT in the market to decline.”

Barely 24 hours later, Zhao again announced Binance’s intent to acquire FTX. However, it soon backed out of that deal and even needlessly publicized the decision. According to the suit, “Zhao publicly disseminated this information [on the withdrawal of the acquisition offer] on Twitter and other social media platforms to hurt FTX Entities that ultimately lead to a rushed and unprecedented collapse of FTX Entities.”

The suit is demanding monetary damages, court costs and the remission of ill-gotten gains based on seven counts. A portion of the filing also states that the plaintiff believes that there are thousands of members in the proposed class.

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Mayowa Adebajo

Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this.
He’s a reader, a researcher, an astute speaker, and also a budding entrepreneur.
Away from crypto however, Mayowa’s fancied distractions include soccer or discussing world politics.

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