- Binance and its CEO, Changpeng Zhao, allegedly attempted to monopolize the market, deliberately harming FTX.
- The lawsuit sheds light on posts made by Zhao in November 2022, which are claimed to have contributed to the collapse of FTX.
- Zhao’s announcement of the liquidation of FTT tokens allegedly caused a 14% decline in FTT’s price.
A class-action suit was filed against Binance and its CEO, Changpeng Zhao, for attempting to monopolize the market by hurting its competitor exchange platform, FTX.
The action suit shed light on some posts made by Zhao on X (previously Twitter) in November 2022 that allegedly led to the collapse of FTX. These posts were, according to the allegations, made to intentionally hurt FTX.
The action suit mentioned a post by Zhao on Sunday, November 6, 2022, when he said, “Due to recent revelations that have come to light, we have decided to liquidate any remaining FTT on our books.” The plaintiffs estimated that Binance held up to 5% of FTT.
However, according to allegations, a day before the post, Binance had already sold and moved 23 million FTT, FTX’s token, which is worth approximately $530 million. Zhao’s words caused the price of FTT to decline by 14% over 24 hours.
On November 7, Zhao added, “We are not against anyone, but we won’t support people who lobby against other industry players behind their backs.” The filing mentioned those posts and stated that Zhao publicly disseminated this information on Twitter and other social media platforms to hurt FTX, which led to an unprecedented collapse of FTX and its entities.
The plaintiff, Nir Lahav, who represents “himself and all others similarly situated”, claimed that when an opportunity to hurt FTX presented itself, Zhao “did not hesitate to trigger the collapse of FTX,” and Zhao’s vendetta hurt the plaintiff.
Furthermore, the filing argued that after Zhao realized “his power over the market and the influence his tweets had on the price of FTT,” he decided to “play the market some more.” On November 7, the Binance CEO stated that they intend to fully acquire FTX. The filing claimed that Zhao’s words “implied to the market that he had confidential information from FTX.”
With this perception, on the next day, Binance pulled back from acquiring the bankrupt crypto exchange. The filing stated that Zhao never had a good faith intention to actually acquire FTX.
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