😎 Summer Sale Exclusive - Up to 50% off AI-powered stock picks by InvestingProCLAIM SALE

Binance and CEO face lawsuit over alleged role in FTX exchange collapse

EditorAmbhini Aishwarya
Published 2023-10-03, 01:58 a/m
FTM/USD
-
FTT/USD
-
FTT/USD
-
FTT/USD
-
FTM/USD
-
FTT/USD
-

A group of investors, led by Nir Lahav, initiated legal proceedings against cryptocurrency exchange Binance and its CEO Changpenz “CZ” Zhao on Tuesday, blaming them for the collapse of rival exchange FTX. The lawsuit alleges violations of unfair competition laws and Security Exchange Commission (SEC) regulations.

The plaintiffs argue that CZ's tweets contributed to the downfall of FTX, with the court filing providing a chronological breakdown of these posts. They claim that CZ's "fear mongering" tweets triggered a rapid 14% drop in the price of FTX's native token, FTT, within just 24 hours. At the time of publication, FTT's price stands at $1.15.

The lawsuit further accuses CZ of using Twitter and other social media platforms to disseminate information aimed at damaging FTX Entities. The plaintiffs allege that these posts led to a hasty and unprecedented collapse of FTX Entities. Following CZ's tweets, the price of FTT reportedly plummeted from $25 to $3, which allegedly drove the exchange into bankruptcy before directors could implement necessary safeguards.

In addition to these accusations, the court filing also highlighted that former FTX CEO Sam Bankman-Fried was known for his advocacy of regulations. However, it is noted that the defendants expressed dissatisfaction with his regulatory efforts.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.