Class-action suit filed against Binance for alleged harm to FTX before its collapse

It went on to declare that Zhaos Nov. 6 tweet, “Due to recent discoveries that have came [sic] to light, we have actually decided to liquidate any remaining FTT on our books,” was deceptive and false, considering that Binance has already sold its FTT holdings, and the post was “intended to cause the price of FTT in the market to decline.” Related: New FTX documentary to spotlight SBF-CZ relationshipThe complainants discovered proof for their claim in the exact same post by Zhao, where he wrote, “We are not versus anybody. […] We wont support individuals who lobby against other market players behind their backs.” The complainants took the latter sentence to suggest that Binance opposed FTX CEO Sam Bankman-Frieds “regulative efforts.” Sad day. Attempted, however– CZ Binance (@cz_binance) November 9, 2022

A class-action match was submitted against Binance.US and Binance CEO Changpeng Zhao on Oct. 2 in the District Court of Northern California alleging different violations of federal and California law on unjust competitors for attempting to monopolize the cryptocurrency market by harming its rival FTX. Source: CourtListenerThe following day, Zhao mentioned in a Twitter post that Binance had signed a letter of intent to acquire FTX, however it backed out of that offer one day later. As part of Binances exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in money (BUSD and FTT). The match declares that Zhaos proposition to get FTX was not made in great faith and the episode would “eventually lead” to the collapse of FTX:” Zhaos tweet resulted in FTT cost decreasing from United States 23.1510 to US 3.1468. As the match noted, both Binance and FTX are currently subject to SEC actions.

A class-action match was submitted against Binance.US and Binance CEO Changpeng Zhao on Oct. 2 in the District Court of Northern California declaring various infractions of federal and California law on unfair competitors for trying to monopolize the cryptocurrency market by hurting its rival FTX. Source: CourtListenerThe following day, Zhao mentioned in a Twitter post that Binance had signed a letter of intent to obtain FTX, however it backed out of that offer one day later on. As part of Binances exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in money (BUSD and FTT).

The suit alleges that Zhaos proposition to get FTX was not made in good faith and the episode would “ultimately lead” to the collapse of FTX:” Zhaos tweet resulted in FTT price decreasing from United States 23.1510 to US 3.1468. The suit demanded financial damages, court costs and disgorgement of ill-gotten gains based on seven counts. “Plaintiff believes that there are thousands of members of the proposed class,” the suit mentioned.

As the match noted, both Binance and FTX are currently subject to SEC actions. Zhao dealt with possible allegations of unfair competitors in the exact same tweet that is pointed out in the match. The CEOs of the crypto exchanges traded jibes on then-Twitter for weeks afterward.Magazine: FTX bankruptcy filing information, Binances crypto industry fund and a U.S. CBDC pilot: Hodlers Digest, Nov. 13-19

Other Questions People Ask

What are the main allegations in the class-action suit filed against Binance for alleged harm to FTX before its collapse?

The class-action suit against Binance and CEO Changpeng Zhao alleges various violations of federal and California law, specifically focusing on unfair competition. It claims that Binance attempted to monopolize the cryptocurrency market by intentionally harming its rival, FTX, leading to its eventual collapse. The suit highlights Zhao's deceptive tweet regarding the liquidation of FTT holdings, which allegedly caused a significant drop in FTT's market price.

How did Changpeng Zhao's actions contribute to the class-action suit against Binance regarding FTX?

Changpeng Zhao's actions, particularly his tweet about liquidating FTT holdings, are central to the allegations in the class-action suit against Binance. The plaintiffs argue that this tweet was misleading and intended to manipulate the market, resulting in a drastic decline in FTT's price. Furthermore, the suit claims that Zhao's proposal to acquire FTX was not made in good faith and contributed to the circumstances leading to FTX's collapse.

What damages are being sought in the class-action suit against Binance related to FTX?

The plaintiffs in the class-action suit against Binance are seeking financial damages, court costs, and disgorgement of ill-gotten gains based on seven counts of alleged misconduct. They assert that Zhao's actions not only harmed FTX but also violated laws against unfair competition. The suit emphasizes that there are potentially thousands of affected individuals who could be part of the proposed class, indicating the widespread impact of Binance's alleged actions.

What evidence do the complainants present in the class-action suit against Binance regarding FTX?

The complainants present evidence from Zhao's own statements, particularly his tweet about liquidating FTT holdings, which they argue was deceptive and misleading. They claim this tweet was designed to drive down the price of FTT, which fell dramatically as a result. Additionally, they reference Zhao's comments about not supporting individuals who lobby against other market players, suggesting a motive behind Binance's actions against FTX.

What implications does the class-action suit against Binance have for the cryptocurrency market?

The class-action suit against Binance could have significant implications for the cryptocurrency market, particularly regarding regulatory scrutiny and competitive practices. If the allegations are proven true, it may lead to stricter regulations on how exchanges operate and interact with one another. Furthermore, the outcome could set a precedent for future cases involving unfair competition and market manipulation within the rapidly evolving crypto landscape.