Leading crypto exchange Binance and its Chief Executive Officer, Changpeng “CZ” Zhao, have recently found themselves in the midst of several adversities and challenges. Only four days after being the target of a lawsuit brought by the Commodities Futures Trading Commission (CFTC), Binance is now facing yet another highly publicized legal battle.
The Moscowitz Law Firm and Boies Schiller Flexner, which is home to attorney David Boies, filed a class action lawsuit late on the evening of March 31. The suit specifically targets the US subsidiary of the Binance exchange, its three major international entities, CEO CZ, noted basketball player Jimmy Butler of the Miami Heat fame and two other crypto influencers.
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The latest lawsuit comes on the same fundamental accusation as echoed by the U.S. authorities — that the exchange was allowing the trade of cryptocurrencies that are deemed unregistered securities — and that few alleged finance gurus on social media promoted the exchange at the behest of commercial benefit. In addition to Butler, the prominent crypto proponents Ben Armstrong, commonly referred to as “BitBoy Crypto” and Graham Stephan, who has a staggering reach of 4 million subscribers on YouTube, have been named in the official complaint. The report categorically claims that:
This is a classic example of a centralized exchange, which is promoting the sale of an unregistered security.
As mentioned by leading media outlet Fortune, the law firms previously collaborated to pursue a class action lawsuit against Voyager — a company that would later declare bankruptcy — as well as two lawsuits connected to the collapse of FTX. The first of these latter attacks were directed at famous individuals who worked for the crypto exchange as highly compensated brand ambassadors. These individuals included the comedian Larry David, the basketball players Shaquille O’Neal and Steph Curry, and the football icon Tom Brady.
Midway through the month of March, Moscowitz Law and Boies Schiller filed a lawsuit against eight influencers who were paid for advocating FTX’s native coin, FTT. The lawsuit asserted that the influencers were responsible for any losses incurred by customers as a result of their mass fan following due to their image as public figures in society.
In light of this news, the price of BNB, Binance’s native cryptocurrency, witnessed a drop of roughly 0.40% in the past 24 hours and is currently exchanging hands at $315.
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