Binance, its CEO Changpeng Zhao, and three crypto influencers are facing a new lawsuit for allegedly promoting unregistered securities. The lawsuit, filed on March 31 in the Southern Florida District seeks $1 billion in damages and accuses Binance of exchanging unregistered securities and rewarding influencers for their unlawful promotion, media reports said.
According to the lawsuit filed in the South District of Florida, the Moscowitz Law Firm and Boies Schiller Flexner have accused Binance of promoting unregistered securities, which the law firm calls a typical instance of a centralized exchange. The suit has also named several influencers, including NBA player Jimmy Butler, YouTube personalities Graham Stephan, and Ben Armstrong, who maintains BitBoy Crypto as his online persona, as having allegedly received payments for unlawfully promoting such services.
The law firm had previously filed a lawsuit against Voyager, alleging that influencers who promote “unregistered securities” are liable for customer losses. The current lawsuit claims that both Binance and the influencers are liable for $1 billion in damages caused to investors, and that investors have no obligation to prove the advertisements influenced them. While three American citizens started the case, the law firm stated that the number of individuals receiving compensation could be in the millions.
In addition to the lawsuit, a recent Financial Times report claims that CZ and other top Binance executives have been concealing the exchange’s ties to China. The report alleges that Binance has been claiming to be based outside of China, despite the fact that its employees and servers are still based in the country.
Binance refutes the accusations of concealing its ties to China, asserting that it has no technological infrastructure, including data or servers, based in China and doesn’t operate there. The exchange admits that it once had a customer support service center in this country for Mandarin speakers but offered relocation support to those employees who wished to continue working for the company starting in 2021. Binance adds that its 8,000 employees working full-time reside across different parts of the world.
