Binance Sued for Alleged Securities Violations and Crypto Market Supremacy
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Binance is embroiled in a lawsuit accusing it of breaching securities laws and engaging in anti-competitive practices in an attempt to dominate the cryptocurrency platform market.
Investor Nir Lahav filed the lawsuit, alleging that Binance disrupted rival trading platforms associated with FTX entities, resulting in violations of the Securities Exchange Act and California’s Unfair Competition Law.
Cryptocurrency giant Binance is in a legal battle over allegations of breaching securities laws and anti-competitive behavior to assert dominance in the crypto platform market. Investor Nir Lahav has filed a lawsuit claiming that Binance’s actions disrupted rival trading platforms linked to FTX entities, violating the Securities Exchange Act and California’s Unfair Competition Law.
The violations include breaches of the Securities Exchange Act and California’s Unfair Competition Law. The proposed class action seeks to include those who invested with FTX between November 6, 2022 and November 8, 2022, during a period of notable market volatility.
The complaint further asserts that Binance and its CEO, Changpeng Zhao (CZ), openly acknowledged their rivalry and animosity towards FTX entities and its founders due to their regulatory efforts.
“When an opportunity to hurt FTX Entities arose, Zhao did not hesitate to trigger the collapse of FTX Entities stock in the market. Zhao’s vendetta has hurt Plaintiff and the Class,” the lawsuit read.
CZ’s actions, including questioning FTX-issued cryptocurrency token FTT and announcing the sale of Binance’s FTT holdings on November 6, 2022, allegedly contributed to a customer run on FTX. This resulted in significant market disruptions and damage to FTX entities.
Binance was originally founded in China but is currently based in the Cayman Islands. The complaint also alleges its continued operations in China. This legal challenge adds to Binance’s growing legal troubles, as the Securities and Exchange Commission (SEC) also recently filed a lawsuit against the company and CZ, citing mishandling of customer funds and violations of securities rules. The exchange’s legal battles underscore the increasing regulatory scrutiny faced by the cryptocurrency industry globally.
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