Binance’s CZ Accused of Market Manipulation Against FTX, Lawsuit Filed!

Binance, the prominent cryptocurrency exchange, along with its key figure, Changpeng Zhao, commonly known as CZ, are battling a sea of challenges.

The latest problem comes from Nir Lahav, a California resident, who has filed a class-action lawsuit accusing Binance of engaging in market manipulation tactics aimed at a former rival in the crypto arena, FTX.

How much truth actually lies behind these accusations? Let’s explore.

CZ’s Tweets Under Scrutiny

Lahav’s main argument revolves around CZ’s tweets from early November, coinciding with a significant period for FTX. On November 6th, CZ made an announcement about Binance’s decision to divest its holdings in FTX’s token, FTT.

However, the lawsuit claims this information was misleading and carried a malicious undertone. The core of the argument is that Binance had offloaded its FTT tokens before CZ’s public announcement, leading some to believe that the intention behind the tweet was to decrease FTT’s market value.

Market Impact

The ripple effect of CZ’s tweet was palpable. Following his announcement, FTT’s value took a sharp dive from US 23.1510 to a startling US 3.1468, pushing FTX into a whirlwind of financial instability leading them to bankruptcy’s doorstep.

The tweet hinted at a reluctance to “support individuals who undermine peers covertly,” which many interpreted as a veiled jab at FTX’s CEO, Sam Bankman-Fried, and his regulatory activities.

Read More: Paradigm Accuses SEC of Overstepping in Binance Lawsuit: Report

A Calculated Move by CZ?

The lawsuit suggests that these weren’t mere coincidences but deliberate actions by CZ to shake FTX’s foundations. CZ’s influence was made evident by creating market uncertainty around FTX and then retracting from an apparent intention to acquire the struggling company. According to the suit, such moves were aimed at sidelining a strong competitor and solidifying Binance’s dominant position in the crypto market.

And did it work?

After FTX’s market troubles, Binance surged in its ranking, becoming the top crypto exchange, boasting an impressive market share of 62.1%. Before these events, FTX was not far behind, holding a third-place position just after Coinbase. The lawsuit alleges that by deliberately triggering FTX’s financial collapse, Binance eliminated a significant competitor and further strengthened its industry dominance.

Also Read: Binance Coin Price Analysis: Will BNB Price Bounce Back Soon?

The Scope of the Lawsuit

The lawsuit is specifically geared towards a defined group. Lahav’s proposed “Nationwide Class” includes any individual or entity in the U.S. who had fiat or cryptocurrency on the FTX platform during the volatile period from November 6 to November 8, 2022. Moreover, a “California Sub-Class” has been defined, focusing exclusively on California residents who engaged with the FTX platform during the same timeframe.

What is your take on this?