Five days after the United States Commodity Futures Trading Commission (CFTC) sued Binance and its CEO Changpeng “CZ” Zhao for purported trading violations, a new $1 billion lawsuit was brought against the cryptocurrency exchange, CZ, and three crypto influencers for promoting unregistered securities.
According to Fortune, a $1 billion lawsuit alleging Binance’s participation in trading unregistered securities and paying influencers for the illegal promotion of such services was filed on March 31 in the Southern District of Florida by the Moscowitz Law Firm and Boies Schiller Flexner. The document read as follows while outlining the charges:
“This is a classic example of a centralized exchange, which is promoting the sale of an unregistered security.”
The law company claimed that influencers promoting “unregistered securities” are accountable for customer losses in a prior lawsuit against Voyager. Based on related allegations, Binance and the influencers — NBA player Jimmy Butler of the Miami Heat and YouTubers Graham Stephan and Ben Armstrong (BitBoy Crypto) — are required to pay $1 billion in penalties to investors.
“We’ve been investigating these same unregistered security issues against Binance for over a year,” added the lawsuit. Promoters and the exchanges facilitating trades of such assets “would be liable” for the customer losses. In addition, the suit claims that investors have no obligation to prove they were influenced by the advertisements.
While three American citizens brought in the case, the lawsuit alleges that “millions” of people could be eligible for damages. The law firm also plans to rope more Binance influencers to the suit in future filings.
CZ and other top Binance executives have been concealing the crypto exchange’s ties to China, claims a Financial Times report.
“We no longer publish our office addresses … people in China can directly say that our office is not in China,” Zhao had reportedly said in a company message group in November 2017.
