Binance, one of the world's leading cryptocurrency exchanges, is embroiled in yet another legal battle.
Moscowitz Law Firm and Boies Schiller Flexner have filed a $1 billion lawsuit in the Southern District of Florida against the exchange, accusing it of promoting unregistered securities, Cointelegraph tells us in a report.
Influencers Involved in Billion-Dollar Lawsuit
Binance's involvement in trading unregistered securities and paying influencers to promote such services, according to the filing, makes it a classic example of a centralized exchange promoting the sale of unregistered security.
The lawsuit also names three crypto influencers as defendants: NBA's Miami Heat forward Jimmy Butler, as well as YouTubers Graham Stephan and Ben Armstrong (BitBoy Crypto), for allegedly promoting unregistered securities.
It is important to recall that notable public figures, including celebrities and sports personalities such as Tom Brady, Stephen Curry, and Larry David, were also implicated in a lawsuit filed by investors who were affected by the FTX crash that occurred in late 2022.
More About the Latest Lawsuit Against Binance
Based on a previous lawsuit against Voyager, the law firm claims that influencers who promote unregistered securities are liable for customer losses.
According to the lawsuit, investors are under no obligation to prove that the advertisements influenced their decisions. Even though the petitioners are three American citizens, the lawsuit claims that millions of people may be eligible for damages. In future filings, the law firm intends to add more Binance influencers to the suit.
A Rough Couple of Weeks for Binance
The lawsuit comes just days after the United States Commodity Futures Trading Commission (CFTC) sued Binance and its CEO, Changpeng CZ Zhao, for allegedly violating trading regulations.
The CFTC accused Binance of, among other violations, illegally offering digital asset derivatives products to US customers without registering with the agency.
Binance has responded to recent legal actions against the company by denying any misconduct and asserting its intention to contest the lawsuits.
Furthermore, the organization has confirmed that it does not operate in China and lacks any technology based in that country, such as servers or data.
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The CEO of Binance, Changpeng Zhao, has issued a statement affirming the company's dedication to transparency and collaboration with regulators and law enforcement globally, including within the United States.
Binance's Compliance Teams, comprising over 750 individuals, many of whom have previous experience with law enforcement and regulatory agencies, are committed to upholding these standards, the CEO asserts.
As an organization with 8,000 full-time employees across Europe, the Americas, the Middle East, Africa, and the Asia-Pacific, Binance has expanded rapidly in recent years. This growth has led to regulatory investigations and inquiries in multiple countries, including the United States, Japan, and the United Kingdom.
The latest lawsuit adds to the growing legal troubles facing Binance and the broader cryptocurrency industry. Regulators worldwide are clamping down on crypto exchanges and other crypto-related businesses, citing fraud, money laundering, and investor protection concerns.
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