Binance, its CEO Changpeng “CZ” Zhao, and three crypto influencers are facing a $1 billion lawsuit for promoting unregistered securities, while a report claims that Binance executives have been concealing the crypto exchange’s ties to China.
A $1 billion lawsuit has been filed against Binance, its CEO Changpeng “CZ” Zhao, and three crypto influencers for promoting unregistered securities. This comes just five days after the United States Commodity Futures Trading Commission (CFTC) sued Binance and its CEO for alleged trading violations.
The lawsuit was filed in the Southern District of Florida by the Moscowitz Law Firm and Boies Schiller Flexner, claiming that Binance was involved in trading unregistered securities and paying influencers for the unlawful promotion of such services.
The law firm alleged that influencers promoting “unregistered securities” are liable for customer losses, and based on similar claims, Binance and the influencers — NBA Miami Heat star Jimmy Butler, and YouTubers Graham Stephan and Ben Armstrong (BitBoy Crypto) — are challenged with paying $1 billion for the damages caused to investors.
The lawsuit alleges that “millions” of people could be eligible for damages, and the law firm plans to rope in more Binance influencers to the suit in future filings. In addition, the suit claims that investors have no obligation to prove they were influenced by the advertisements. The law firm has been investigating these same unregistered security issues against Binance for over a year.
Meanwhile, a Financial Times report claims that CZ and other top Binance executives have been concealing the crypto exchange’s ties to China. According to the report, Binance had reportedly said in a company message group in November 2017 that they no longer publish their office addresses, and people in China can directly say that their office is not in China.
However, Binance has confirmed that the company “does not operate in China nor do we have any technology, including servers or data, based in China.” According to Binance, its 8,000 full-time employees live across Europe, the Americas, the Middle East, Africa and the Asia-Pacific.