A huge lawsuit with a total of $1 billion in damages was filed against Binance and its CEO Changpeng Zhao as well as celebrities including NBA star Jimmy Butler on Friday. The Moskowitz Law Firm and Boies Schiller Flexner conducted an investigation for one year and made this move, which followed the Commodity Futures Trading Commission’s (CFTC) lawsuit against Binance, accusing it of violating trading and derivatives rules.

The lawsuit alleges that Binance and Changpeng Zhao advertised and sold unregistered securities, and this propagation was also seen in traditional media and by hiring brand ambassadors such as Butler. Allegedly, Youtubers and influencers Ben Armstrong, known as BitBoy Crypto, and Graham Stephan have received kickbacks for getting people to sign up to Binance.

Binance is the world’s largest crypto exchange and its native token BNB is the fourth largest digital asset with a current market capitalization of over $48 billion. This lawsuit focus on the burn rate of BNB which is determined exclusively by Changpeng Zhao and it is seen as an example of a centralized exchange that promotes the sale of an unregistered security.

Last week’s lawsuit is only the latest illustration of how U.S. authorities are increasingly monitoring Binance and how it is being operated. The billion-dollar lawsuit could have major implications for digital asset proponents, as any verdicts reached by the court may set a lasting precedence for the wider industry. To respond to the lawsuit, Binance stated that “we are aware of the filing and are investigating; however, it would be inappropriate for us to comment further at this time”. It remains to be seen if Changpeng Zhao and the other defendants will be successful in managing the accusations.



Other News from Today