Popular YouTubers Graham Stephan and Bitboy_Crypto face another billion-dollar lawsuit for allegedly promoting Binance, a cryptocurrency exchange, on their social media platforms. The lawsuit seeks $1 billion in damages and names NBA star Jimmy Butler and Binance CEO Changpeng Zhao as co-defendants.
The lawsuit alleges that the influencers were compensated for endorsing Binance but failed to disclose their financial ties, which violates US securities regulations. Moreover, Stephan and Bitboy_Crypto have faced similar allegations, as they were previously sued for promoting a different cryptocurrency without adequate disclosures.
Legal battle ensues over Binance securities violation
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.
Another blow for CZ: New legal case emerges
On the other hand, Changpeng Zhao, popularly known as CZ, has been dealt another blow with the latest legal case against him, which comes as an additional setback. This adds to his existing legal troubles with the United States Commodity Futures Trading Commission (CFTC) pursuing legal action against him.
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.
Moreover, the legal case claimed that the company had directed its staff to manipulate their location information by utilizing virtual private networks (VPNs) and that Zhao, as the organization’s leader, had supervised this activity.
