Last Friday, a group of investors filed a class action lawsuit in Seattle court against Binance and Changpeng Zhao. The complaint accuses the platform of facilitating the laundering of stolen funds.
Binance and CZ Face Class Action Lawsuit
At the end of last week, A Seattle court has received a complaint against Binance and Changpeng Zhao (CZ)the group's founder and former CEO. This is a class action lawsuit by a group of investors who had their cryptocurrencies stolen and who believe that the exchange bears some responsibility for how the criminals laundered the funds.
First, let's remember that by definition, most blockchain technologies provide the ability to track funds through transaction history. To go beyond this technical feature, a malicious actor can send funds to a centralized platform, exchange them for other assets, and then withdraw them. By doing this, it becomes much more difficult to link addresses without the platform cooperating with the law.
This is the point in particular that is being debated, with Binance being accused of having, in a certain way, played a role as a mixer :
Given that CZ and others at Binance prioritize profits over the law, Defendants, through their operation of Binance.com, generated substantial amounts of money by providing malicious actors with a means to remove the link between the ledger and their digital assets so that the assets could no longer be traced.
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If the case were to go to trial, Bill Hughes, a lawyer at Consensys, said on-chain analysis of such transactions would be a challenge for specialists.
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A violation of the RICO Act?
Another important point in this 77-page complaint is an accusation of the Racketeer Influenced and Corrupt Organizations Act (RICO law). In short, this law allows justice to prosecute actors involved in organized criminal activities. Among other things, the class action relies on what we have described above to support its argument:
👀🚨👀🚨 @binance and @cz_binance were sued last Friday by class plaintiffs in Seattle federal court. An interesting class action brought by top class action lawyers alleging consumer harm as a result of Binance's money laundering. And the natural, predictable follow-on civil… pic.twitter.com/vMlFuUnzEr
— Bill Hughes: wchughes.eth 🦊 (@BillHughesDC) August 20, 2024
For now, let us note that this is only a complaint and that no trial seems to be scheduled yet. It will then be a matter of remaining attentive to the turn of events, as Binance and CZ have already been tried for having violated the banking secrecy law between 2017 and 2022.
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For its part, BNB is trading at $561, down 1.55% over 24 hours.
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Source: Class Action
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Since 2021, I have devoted my free time to seriously training myself on cryptocurrencies in order to acquire as much knowledge and credibility as possible. I often have the opportunity to conduct interviews with influential figures in the blockchain industry. I also conduct in-depth analyses on Web3 themes to offer exclusive content to Cryptoast readers.
Vincent Maire
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