Lawsuit accuses Binance and CEO of unfairly triggering collapse of competitor FTX

A people enactment suit was filed connected Oct. 2 successful California national tribunal accusing cryptocurrency speech Binance and its CEO Changpeng Zhao (CZ) of unfair contention and manipulating the marketplace to trigger the downfall of rival speech FTX.

The suit was filed by an FTX idiosyncratic who mislaid assets erstwhile FTX collapsed and filed for bankruptcy past month. It alleges Binance, which held a involvement successful FTX’s FTT token, made mendacious nationalist statements astir selling that stake, causing FTT’s terms to decline, past made misleading statements astir intending to get FTX, temporarily stabilizing FTT’s terms earlier again declining an acquisition.

According to the complaint, Binance had invested successful FTX’s FTT token successful 2019 and owned up to 5% of the full FTT supply. On Nov. 6, CZ tweeted that Binance would merchantability its remaining FTT owed to “recent revelations,” causing FTT to driblet 14% successful 24 hours. However, the suit claims Binance had already sold 23 cardinal FTT worthy $530 cardinal the time earlier Zhao’s tweet.

The suit asserts CZ deliberately misled the marketplace to trigger a diminution successful FTT and undermine assurance successful rival FTX. It further alleges that tweets by CZ connected Nov. 7 astir Binance signing a nonbinding missive of intent to get FTX were besides misleading, temporarily halting FTT’s slide. The adjacent day, CZ tweeted that Binance would not get FTX aft all, sending FTT plunging again and forcing FTX into bankruptcy.

The people enactment accuses Binance and CZ of unfair competition, marketplace manipulation, fraudulent practices, and making mendacious statements, asserting that their actions were driven by animosity toward FTX and its founders’ lobbying for greater crypto regulation. It claims Binance engaged successful ‘bait and switch’ tactics to accelerate FTX’s illness aft Binance sold its FTT stake.

The suit seeks damages for FTX users incapable to entree their funds arsenic good arsenic disgorgement of Binance’s alleged ill-gotten gains from benefitting astatine FTX’s expense. It claims Binance’s marketplace stock has substantially accrued since eliminating its large rival.

Binance and CZ person not yet commented connected the lawsuit. The lawsuit underscores the ongoing deficiency of regulatory clarity astir cryptocurrencies arsenic disputes play retired successful the courts.

The station Lawsuit accuses Binance and CEO of unfairly triggering illness of rival FTX appeared archetypal connected CryptoSlate.