Binance is facing a massive $1 billion lawsuit along with its CEO and three influential figures in the crypto space. The lawsuit alleges that Binance involved in trading unregistered securities and paid influencers, including NBA Miami Heat star Jimmy Butler and YouTubers Graham Stephan and Ben Armstrong, to promote such services unlawfully.
The legal action, initiated by three American citizens, could involve millions of people who may be eligible for damages. The suit says that investors are not required to prove that the advertisements influenced them. This could make it easier for affected investors to claim damages.
“This is a classic example of a centralized exchange, which is promoting the sale of an unregistered security.”
Also, the lawsuit revealed that the investigation into Binance’s alleged unregistered security issues has been ongoing for over a year. According to the claim, promoters, and exchanges facilitating trades of such assets “would be liable” for customer losses. This could have far-reaching implications for other cryptocurrency exchanges and their promotional practices, potentially affecting millions of investors worldwide.
According to a Financial Times report has accused CZ and other top Binance executives of hiding the cryptocurrency exchange’s connections to China. This has raised concerns about the transparency and regulation of the cryptocurrency industry.
Moreover, Binance has denied any wrongdoing and maintained that the company “does not operate in China nor do we have any technology, including servers or data, based in China.” However, the lawsuit and allegations of concealing ties to China have highlighted the regulatory scrutiny and legal challenges the cryptocurrency industry faces.