As the world eagerly awaits the outcome of the trial of Sam Bankman-Fried, accused of being behind the fall of his empire, FTX, a surprising complaint has just emerged. The complaint suggests that Binance and its founder, CZ, also played a role in the decline of SBF’s empire.
Binance and CZ under fire in class action suit
As the trial against SBF, the alleged architect behind FTX’s downturn, gets underway, former exchange user Nir Lahav has initiated a class-action lawsuit against Binance and its CEO. The suit cites multiple purported violations of federal and California unfair competition laws.
The core allegations in this case are intricately connected to tweets that Zhao posted in November of the previous year, as well as a proposal to purchase Binance shortly before FTX’s downfall. These tweets from CZ are suspected to have contributed to the platform’s decline.
Nir Lahav claims that CZ, the CEO of Binance, attempted to monopolize the market by undermining its direct competitor, FTX, and its platform token, FTT.
Class action blames CZ for FTT’s downfall
On November 6, 2022, CZ captured media attention with a series of tweets announcing Binance’s decision to liquidate its FTT holdings. This came following financial revelations concerning Alameda Research and FTX.
In one of his tweets, CZ had announced that, in light of the revelations concerning FTX, he had decided to liquidate all remaining FTTs.
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Nonetheless, the plaintiff contend that this statement was both false and misleading. He argues that Binance had already divested its FTT holdings and suggest that the tweet was intentionally crafted to depress FTT’s market value.
Zhao’s tweet caused the price of FTT to fall from 23.1510 to 3.1468 USD. This significant drop played into FTX’s downfall, without giving FTX’s management and board an opportunity or a chance to salvage the situation.
Extract from the document
Is Binance’s takeover bid a Machiavellian maneuver to topple its rival?
Prior to FTX’s total collapse, Binance had signaled its intent to purchase the competing platform. However, a thorough review of the acquisition documents revealed inconsistencies, causing Binance to abandon the deal. Changpeng Zhao publicly confirmed the withdrawal.
The class-action lawsuit alleges that Binance’s bid to acquire FTX was not made in good faith and contributed to FTX’s eventual downfall. Consequently, the lawsuit is seeking financial reparations, coverage of legal expenses, and the return of profits purportedly earned through dishonest means.
Given these circumstances, a pressing question arises: Was Changpeng Zhao genuinely attempting to hasten the decline of his rival, or are these allegations merely part of a larger scheme aimed against him?
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.
