On the sidelines of the Sam Bankman-Fried trial, a class action suit has been filed against Changpeng Zhao (CZ) and Binance.US, accusing them of unfair competition against FTX. What are these allegations about?
Binance.US and Changpeng Zhao targeted in FTX class action
As the trial of Sam Bankman-Fried (SBF) got underway this week, the next few weeks could be full of revelations about the extent of his financial crimes. In the midst of this atmosphere, a class action suit has been filed against Binance.US and Changpeng Zhao (CZ), accusing them of unfair competition against FTX.
A man named Nir Lahav has built up a case, listing the tweets that CZ published last year about a potential takeover of FTX by Binance, before the situation changed.
For this, we need to go back to November 2022, when CZ announced that Binance had liquidated its positions in FTX, causing the token to plummet. Shortly after the start of their due diligence study, Binance informed us that it was terminating the agreement, citing mismanaged customer funds, while we still didn’t know the full extent of the situation.
For its part, CZ referred to a “sad day”:
Sad day. Tried, but
– CZ Binance (@cz_binance) November 9, 2022
So, Nir Lahav uses all these elements, to accuse the Binance CEO of “publicly tweeting to harm” FTX:
“On November 8, 2022, Binance, now seemingly armed with confidential information from the FTX Entities, suddenly stepped down, with accused Zhao tweeting a putative emoji expressing regret. Zhao publicly spread this information on Twitter and other social networking platforms to harm the FTX Entities, ultimately leading to a precipitous and unprecedented collapse of the FTX Entities. “
Of course, there is no indication that any trial is guaranteed in the face of these charges. Now that the class action has been filed, it’s up to the Oakland Division of the U.S. District Court for the Northern District of California to follow through or not.
While Binance’s and CZ’s tweets may have accelerated the downfall of FTX and the FTT token, the defenders can in no way be held responsible for SBF’s actions which, one way or another, could only end up going wrong.
