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 that they engaged in unfair competition by attempting to monopolize the cryptocurrency market, specifically targeting FTX. The plaintiffs claim that Zhao's tweet on November 6, 2022, was deceptive and intended to manipulate the price of FTT, leading to significant financial losses for FTX. The suit also suggests that Binance's proposal to acquire FTX was not made in good faith, contributing to FTX's eventual collapse.

How did Changpeng Zhao's actions allegedly impact FTX before its collapse?

According to the class-action suit, Changpeng Zhao's tweet about liquidating FTT holdings caused a drastic drop in the token's price, from $23.15 to $3.15. This price decline is cited as a critical factor that destabilized FTX financially. The plaintiffs argue that Zhao's actions were part of a broader strategy to harm FTX and solidify Binance's dominance in the cryptocurrency market.

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

The plaintiffs in the class-action suit are seeking financial damages, court costs, and the disgorgement of ill-gotten gains from Binance and Zhao. They believe that the actions taken by Binance led to substantial losses for FTX and its stakeholders. The suit outlines seven counts of alleged violations of federal and California law, emphasizing the need for accountability in the cryptocurrency industry.

What evidence do the plaintiffs present in the class-action suit against Binance regarding Zhao's tweet?

The plaintiffs reference Zhao's November 6 tweet as a key piece of evidence, arguing it was misleading and intended to drive down the price of FTT. They assert that this tweet was part of a calculated effort to undermine FTX while Binance was simultaneously negotiating a potential acquisition. This contradiction is central to their claims of unfair competition and bad faith actions by Binance.

What is the current status of both Binance and FTX in relation to regulatory actions?

Both Binance and FTX are currently under scrutiny from the SEC, which adds another layer of complexity to the class-action suit. The regulatory actions highlight ongoing concerns about compliance and fair practices within the cryptocurrency market. As these legal proceedings unfold, they may significantly impact the future operations of both companies and their standing in the industry.