SNEAK PEEK
- Binance, Bitboy_Crypto and CZ face a $1 billion lawsuit for promoting unregistered securities.
- The influencers allegedly received payments without disclosing financial relationships.
- Binance is facing legal action from the CFTC for violating derivatives trading regulations.
Binance, a cryptocurrency exchange, and its CEO, Changpeng Zhao, commonly known as CZ, are facing a $1 billion lawsuit for allegedly promoting unregistered securities that harmed investors.
The lawsuit also named three other influencers, including popular YouTuber BitBoy_Crypto, who are accused of promoting these securities to their followers without disclosing their financial interests in them. The lawsuit further dubbed NBA star Jimmy Butler as a co-defendant.
According to the suit, the influencers received payments in exchange for promoting Binance without disclosing their financial relationships, violating US securities laws. Moreover, this is not the first time that Bitboy_Crypto has faced such accusations, having been sued previously for promoting a different cryptocurrency without proper disclosures.
On the same accord, the lawsuit alleges that the centralized exchange is engaged in the promotion of unregistered securities, citing it as a typical case in point. Furthermore, the lawsuit notes that the plaintiff has been conducting investigations into the issue of unregistered securities concerning Binance for a period exceeding one year.
The lawsuit further adds that promoters and exchanges responsible for facilitating trades of such assets will be held accountable for any losses incurred by customers. Additionally, the suit asserts that investors are not obligated to demonstrate that they were swayed by the advertisements.
On the other hand, this latest lawsuit is yet another setback for CZ Changpeng Zhao, who is already facing legal action from the United States Commodity Futures Trading Commission (CFTC).
The CFTC filed a complaint against Binance and CZ, accusing them of violating derivatives trading regulations. This is evident as Binance allowed US customers to trade cryptocurrency derivatives on the platform without being registered with the CFTC.