Binance and CZ Get Another Class Action Lawsuit Just Slightly Over a Month Before His Release
Binance and CZ get slapped with a new lawsuit alleging they committed RICO.
- The plaintiffs who previously filed lawsuits against Facebook and Wells Fargo have now initiated a class action lawsuit against CZ and Binance.
- CZ is no longer the CEO of Binance, and notably, the current CEO, Richard Teng, has not been named as a defendant in the lawsuit.
- Zhao previously said it was better to “ask for forgiveness than permission.”
Binance’s former CEO, Changpeng “CZ” Zhao, was imprisoned as part of the exchange’s settlement with the SEC. Just over a month before his release, he faces another class action lawsuit, alleging that Binance violated the RICO statute.
The class plaintiffs represent users whose cryptocurrency was stolen in hacks and thefts, with the stolen funds being transferred to Binance. They argue that Binance was aware of these activities and, to some extent, even encouraged them as part of its “lucrative business model.”
Accusations Against Binance
The lawsuit contends that Binance played a critical role in the laundering process, amounting to illegal racketeering violating the RICO statute. It also argues that blockchain transaction tracing could have given victims a chance to recover their stolen funds.
The plaintiffs have previously initiated major class action lawsuits, including cases against Facebook for consumer privacy violations and Wells Fargo for creating fraudulent accounts.
Consensys lawyer Bill Hughes also points out the following:
“If this case goes far into discovery and even to dispositive pre-trial motions… then the efficacy of blockchain analytics itself and on-chain asset recovery will be on trial!”
CZ’s Release Date is on September 24
CZ may have to confront the lawsuit immediately upon his release. While he is no longer the CEO of Binance, now led by Richard Teng, the class action likely pertains to a period when CZ was still in charge.
In summary, the class action claims that the defendants prioritized profits over the law, benefiting from the alleged ill-gotten gains. Zhao previously remarked that it is better to “ask for forgiveness than permission.”
The lawsuit challenges the integrity and effectiveness of blockchain analytics and on-chain asset recovery, raising significant implications for Binance and the entire cryptocurrency industry.
