Binance.US and its CEO, Changpeng Zhao, are facing a class-action lawsuit filed in the Northern California District Court. The lawsuit, initiated by a California resident, Nir Lahav, alleges that Binance engaged in unfair competition and attempted to monopolize the market, particularly targeting its competitor, FTX.
The legal action centers around tweets made by Zhao in November, coinciding with a crucial period for FTX's financial stability. Zhao publicly announced Binance's decision to sell its holdings in FTX's utility token, FTT, on November 6th. The plaintiffs claim that this announcement was not only misleading but also maliciously intended. They argue that Binance had already sold its FTT holdings before the tweet and that the announcement was designed to drive down FTT's market price.
The lawsuit further asserts that Zhao's actions were part of a broader strategy to destabilize FTX, leading to a significant drop in FTT's price and pushing FTX into bankruptcy. This legal battle has left FTX's executives and board of directors facing a challenging situation.