A class-action suit was filed against Binance.US and Binance CEO Changpeng Zhao on Oct. 2 in the District Court of Northern California alleging various violations of federal and California law on unfair competition for attempting to monopolize the cryptocurrency market by harming its competitor FTX. The suit was brought by Nir Lahav, who is identified only as a California resident.
At issue are posts made by Zhao on Twitter (now X) in early November on the eve of FTX’s collapse. The posts were made in conjunction with the decision by the defendants to liquidate their holdings in the FTX utility token FTT on Nov. 6. The plaintiffs estimated that Binance owned up to 5% of all FTT tokens.
Suit filed against Binance and Changpeng Zhao. Source: CourtListener
The following day, Zhao stated in a Twitter post that Binance had signed a letter of intent to acquire FTX, but it backed out of that deal one day later. According to the suit:
“Zhao publicly disseminated this information [on the withdrawal of the acquisition offer] on twitter and other social media platforms to hurt FTX Entities that ultimately lead to a rushed and unprecedented collapse of FTX Entities.”
After began its argumentation with a defense of the Securities and Exchange Commission’s (SEC) policies on crypto and invocation of the Supreme Court’s Howey and Reves decisions, among others.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
It went on to claim that Zhao’s Nov. 6 tweet, “Due to recent revelations that have came [sic] to light, we have decided to liquidate any remaining FTT on our books,” was false and misleading, since Binance has already sold its FTT holdings, and the post was “intended to cause the price of FTT in the market to decline.”
The plaintiffs found evidence for their claim in the same post by Zhao, where he wrote, “We are not against anyone. […] But we won’t support people who lobby against other industry players behind their backs.” The plaintiffs took the latter sentence to indicate that Binance opposed FTX CEO Sam Bankman-Fried’s “regulatory efforts.”
The suit alleges that Zhao’s proposal to acquire FTX was not made in good faith and the episode would “ultimately lead” to the collapse of FTX:
“Zhao’s tweet resulted in FTT price declining from US 23.1510 to US 3.1468. This significant drop plummeted FTX Entities into bankruptcy without giving an opportunity or chance to FTX Entities’ executives and board of directors a chance [sic] to salvage the situation and put in safe guards to protect its clients and end-users.”
The suit demanded monetary damages, court costs and disgorgement of ill-gotten gains based on seven counts. “Plaintiff believes that there are thousands of members of the proposed class,” the suit stated.
CZ just executed the most gangster play we’ve seen in Crypto, ever, period. The BALLS on this man. Truly — bravo.
Also bravo to Sam to choose the correct option that protects customer assets, swallow his pride, and not burn everything down in an unnecessary fight.
As the suit noted, both Binance and FTX are currently subject to SEC actions. The criminal case against Bankman-Fried will begin Oct. 4 in New York. Zhao addressed potential accusations of unfair competition in the same tweet that is cited in the suit. “Regarding any speculation as to whether this is a move against a competitor, it is not,” he wrote.
A Reform UK canvasser who used a racial slur against Rishi Sunak has called himself a “total fool” and said he has learned his lesson.
Footage from an undercover Channel 4 reporter showed Reform campaigner Andrew Parker using a discriminatory term about the prime minister, as well as saying the army should “just shoot” migrants crossing the Channel.
Mr Parker, who was canvassing in Clacton, where Reform leader Nigel Farage is standing, told Sky News the sting operation had “proper taught me a lesson”.
He said: “There’s lots of old people like me who are sick to death of this woke agenda… but on that particular day, I was set up and set up good and proper.
“It’s proper taught me a lesson – I was a total fool.”
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Pressed on his use of the racial slur, he said he was an “old man” and “I still use old words”.
“There’s no racism at all in it. I am a decent guy to be honest”, he added.
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In the Channel 4 report, Mr Parker can be heard using offensive language about the prime minister and also discussing migrants arriving in small boats in Deal, Kent
He said: “Army recruitment – get the young recruits there, with guns, on the f****** beach, target practice. F****** just shoot them.”
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Sunak ‘hurt’ over Reform race row
He also described Islam as a “disgusting cult”.
Mr Farage said he was “dismayed” by the “appalling” comments and has sought to distance himself from the campaigner, saying he was simply “someone who turned up to help” and “has nothing to do with the party”.
He has also used reports Mr Parker was a part-time actor to suggest the incriminating film was a “total set-up” – something Channel 4 has strongly denied.
Mr Parker himself says his volunteering for Reform was separate from his acting job – and claims he was “goaded” into making the comments.
A spokesperson for Channel 4 said: “We strongly stand by our rigorous and duly impartial journalism which speaks for itself.
Image: Farage has tried to distance himself from the comments
“We met Mr Parker for the first time at Reform UK party headquarters, where he was a Reform party canvasser.
“We did not pay the Reform UK canvasser or anyone else in this report. Mr Parker was not known to Channel 4 News and was filmed covertly via the undercover operation.”
The broadcaster’s investigation also caught another canvasser describing the Pride flag as “degenerate” and suggesting members of the LGBT community are paedophiles.
A spokesman for Essex Police said the force is “urgently assessing” the comments “to establish if there are any criminal offences”.
PM ‘hurt and angry’ over racial slur
Mr Sunak reacted furiously to the comments and said Mr Farage had “some questions to answer”.
He said: “My two daughters have to see and hear Reform people who campaign for Nigel Farage calling me an effing P***. It hurts and it makes me angry and I think he has some questions to answer.
“And I don’t repeat those words lightly. I do so deliberately because this is too important not to call out clearly for what it is.
“As prime minister, but more importantly as a father of two young girls, it’s my duty to call out this corrosive and divisive behaviour.”
Unrepentant Farage doubles down
However, Mr Farage was unrepentant when grilled on the row during a BBC Question Time leaders’ special, saying he was “not going to apologise” for the actions of people associated with his party.
Reform UK has faced a series of controversies relating to election candidates saying offensive or racist things.
Asked why his party “attracts racists and extremists”, the former UKIP leader claimed he had “done more to drive the far right out of British politics than anybody else alive” – claiming he took on the British Nationalist Party (BNP) a decade ago.
He also appeared to throw his predecessor Richard Tice under the bus when read racist and xenophobic comments made by Reform candidates, saying he “inherited a start up party” and has “no idea” why the people who said those things had been selected.
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