Another class action lawsuit against Binance Exchange and CEO Changpeng “CZ” Zhao is pending because of an unhealthy FTX game.
Another class action lawsuit has been filed against cryptocurrency exchange Binance Holdings Ltd. and its CEO Changpeng ‘CZ’ Zhao, for allegedly contributing to the demise of its main rival, FTX Derivatives Exchange.
According to a Bloomberg story, the class action lawsuit was submitted earlier this week in the United States District for the Northern District of California.
According to the allegations, Binance engaged in unfair competition and market manipulation to cause the demise of the FTX, which had its headquarters in the Bahamas.
In light of this, Plaintiff Nir Lahav asserts that the Zhao-led exchange broke California’s Unfair Competition Law and the US Securities Exchange Act. Notably, issues began at FTX last year following Binance’s public announcement that it terminated its agreement with the now-defunct cryptocurrency exchange.
Binance began investing in FTX Tokens (FTT) in 2019 and currently owns around 5% of the coin’s supply. CZ tweeted about his company’s intention to sell out the remaining FTT ownership on November 6, 2022, claiming a “recent revelation.”
The revelation incited a stir in the larger cryptocurrency community, especially among FTX buyers. Within a few hours of CZ’s statement, the value of the FTT currency dropped significantly. Many FTX users started to sell off their holdings as they grew pessimistic about the exchange’s future.
