Some Major Crypto Influencers May be Facing $1 Billion in Suits!

Photo by Kanchanara on Unsplash

The cryptocurrency exchange Binance and its chief executive officer, Changpeng Zhao (CZ), are currently facing yet another set of challenges in the form of a prominent court case.

Just a few days after the United States CFTC filed a lawsuit against Binance, the law firms of Moskowitz Law Firm and Boies Schiller Flexner also have fined another class action lawsuit attacking the Binance chief in addition to other celebrities such as NBA star Jimmy Butler, for publicizing unregistered securities.

These two law firms have jointly initiated a lawsuit in the Southern District of Florida seeking one billion dollars in damages.

The lawsuit alleges that Binance undertook trading of unregistered securities and paid influencers for unlawful advertising. Additionally, the lawsuit contends that Binance paid for illicit promotions.

According to the lawsuit, “this is a textbook example of a centralized exchange,” which is “promoting the selling of an unregistered security.”

The managing partner of Moskowitz Law Firm, Adam Moskowitz, had a conversation with the Fortune journal regarding the specifics.

The legal firm had claimed at the time that influencers who promoted “unregistered securities” would be accountable for the financial damages that their clients incurred.

Similar allegations have been made against Binance and a number of its influencers, including NBA player Jimmy Butler of the Miami Heat and YouTubers Ben Armstrong (BitBoy Crypto) and Graham Stephen. These individuals are accused of causing $1 billion in damages to Binance’s clients.

Moskowitz states (1), “We have been investigating these unregistered security problems against Binance for over a year now.”


Hundreds of Millions of Potential Claimants for Damages

According to the complaint that was brought forward by three investors from the United States, “millions” of individuals might be eligible for the damages.

The legal firms intend to expand the number of Binance influencers who are involved in the lawsuit in subsequent filings. The plaintiffs include two people who live in Florida and one individual who hails from California.

According to what Moskowitz said to Fortune:

According to the statute, an influencer who promotes unregistered security and has a financial interest in doing so may be liable to everyone who purchased the assets if the influencer is found to have a financial interest in the promotion.

The exchange that helps to make the deals possible would also be accountable for the losses.

Binance’s native coin, BNB, and its Affiliate program are both mentioned in the case, which is an interesting development.

In the lawsuit, it is alleged that the chief of Binance, CZ, destroyed or somehow got rid of the BNB. As a consequence, it decreases supply in an effort to increase its prices, which is an action that marks BNB as a security.

The lawsuit also provides information regarding how Binance affiliates were able to get rebates on trades made by investors that they recruited and who “clicked through their link” in order to purchase and sell cryptocurrencies on the Binance platform.

As a result, Stephen and Armstrong are named as defendants in the lawsuit for fraudulently advertising unregistered securities.

According to an interview that Moskowitz gave to Fortune, he stated that “if we win on the unregistered securities problem, there will be no doubt that Binance and the influencers are accountable.”

It is quite amusing that FTX was meant to be the savior of Voyager until their scam was discovered and that now Binance is supposed to be the next rescuer.

It’s possible that this is the last chance for victims of crypto fraud to seek any kind of compensation for the damages they incurred as a result of fraudulent activities.

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