Three crypto investors have filed a new class-action lawsuit against Binance and its former CEO, Changpeng Zhao. Specifically, they claim that the exchange’s failure to stop money laundering prevented them from recovering their stolen assets.
Additionally, a class-action lawsuit, filed on Aug. 16 in the U.S. District Court for the Western District of Washington, Seattle, claims that hackers stole the plaintiffs’ crypto and transferred it to Binance to make it untraceable by “breaking the link between the ledger and their digital assets. Plaintiffs argue that Binance intentionally avoided U.S. regulations that would have limited access to the profitable American market.
Binance in a tough spot over class action
Bill Hughes, senior counsel and director of global regulatory matters at Consensys expressed doubt about the suit’s ability to prove these allegations. Moreover, in an Aug. 20 X post, Hughes called the new class-action suit a “natural, predictable follow-on civil action” aimed at taking advantage of ongoing government prosecutions.
However, according to Hughes, the lawsuit could put Binance in a tough spot, potentially impacting the crypto industry heavily if it goes to trial.
In Nov, CZ confessed to breaking U.S. money laundering laws and resigned as Binance CEO as part of a settlement. Additionally, Binance agreed to pay $4.3 billion in fines for regulatory issues. In Apr, the judge sentenced Changpeng Zhao to four months in prison, shorter than the three years proposed by federal prosecutors. He began serving the sentence in June and will be released in Sept. 2024.
The U.S. Securities and Exchange Commission filed a lawsuit against Binance in June. 2023. Specifically, the SEC accused the exchange and its CEO, CZ, of misleading regulators about market surveillance controls and inflating trading volumes. On June. 28, a court allowed most of the case to proceed.
