The hits keep coming for Binance.
Mere days after being served with a lawsuit from the US Commodity Futures Trading Commission for allegedly breaching commodities law over its derivatives productions, the world’s foremost cryptocurrency exchange is now facing a one-billion-dollar class action lawsuit jointly filed by Moscowitz Law Firm and Boies Schiller Flexner.
In a blog post published by Moscowitz, the firm stated: “The action is founded on the assertion that the assets traded on the exchange are in fact unregistered securities, which were being promoted illegally by the Binance-paid influencers.
Unregistered securities allegations are nothing new for Binance; the US Securities and Exchange Commission (SEC) sued the company’s BUSD stablecoin partner Paxos for issuing what it deemed to be an unregistered security.
The action forced Binance to cease minting the stablecoin to US customers, causing a significant fall in BUSD’s market capitalisation.
Binance founder Changpeng ‘CZ’ Zhao is named in the latest lawsuit alongside three well-known crypto influencers: Miami Heat basketball star Jimmy Butler; content creator Ben Armstrong aka BitBoy Crypto; and real estate YouTuber Graham Stephan.
Moskowitz is known in the cryptocurrency space for its appetite for class action lawsuits.
Last year, the firm brought a class action against collapse crypto lender Voyager Digital (CSE:VYGR, OTCQX:VYGVF) for investor losses of US$5bn.
Moscowitz also coordinated two actions against FTX before federal and state courts, targeting the failed company's brand ambassadors including Shaquille O'Neal, Larry David, Steph Curry, and Tom Brady.
“If we win on the unregistered securities issue, there will be no question that Binance and the influencers are liable,” Moskowitz said in an interview with Fortune.
Armstrong responded to the class action by labelling Moscowitz “a walking piece of human garbage”.
Other defendants have yet to respond publicly to the allegations.