Californian Resident Files Lawsuit Against Binance and Its CEO for Allegedly Hurting FTX

On October 2, a Californian resident named Nir Lahav filed a lawsuit against Binance.US and Binance CEO Changpeng Zhao based on alleged violations of Security Exchange Commission (SEC) laws regarding unfair competition for their attempt at monopolizing the crypto market by bringing harm to FTX crypto exchange.

The lawsuit filed in the District Court of Northern California noted Binance‘s investment in competitor FTX Entities and its crypto FTT four years ago. Specifically, Binance invested and owned up to 5 percent of aggregate FTT tokens in the market, and Zhao tweeted about Binance’s receipt of about $2.1bn equivalent in cash (BUSD and FTT).

The plaintiff claimed that the defendants were not happy with the efforts of Sam Bankman-Fried, the CEO and founder of competitor platform FTX, to promote regulatory efforts for crypto and crypto exchange in the United States, based on information and belief.

“On Sunday November 6, 2022, Zhao tweeted, ”Due to recent revelations that have came [sic] to light, we have decided to liquidate any remaining FTT on our books.“ On Saturday November 5, 2022, the day before his tweet, Binance had already sold and moved 23 million FTT (worth approximately $530 million),” reads the court document.

Another claim by the plaintiff says Zhao‘s tweet prompted a 14 percent fall in prices of FTT within 24 hours. One of the tweets by Zhao says “We are not against anyone…But we won’t support people who lobby against other industry players behind their backs.”

Zhao later revealed the signing of a non-binding to fully acquire FTX.com, but suddenly pulled back a day after, “now appearing to be armed with confidential information from FTX Entities”, said the plaintiff. He allegedly engaged in public dissemination of this information via social media platforms to hurt FTX Entities, thereby prompting a rushed and unprecedented collapse of FTX Entities.