October 2 in California District Court filed a class action lawsuit against the Binance exchange and its CEO Changpeng Zhao. The company is accused of unfair competition and an attempt to monopolize the market by putting pressure on the FTX platform.
The crux of the matter
In early November 2022, CoinDesk published a report according to which Alameda Research’s balance sheet consisted largely of FTT tokens. Against this background, Zhao said that Binance intends to liquidate its share of assets.
At that time, the exchange controlled about 5% of the entire FTT supply. Former CEO of Alameda Research Caroline Ellison offered Zhao to buy out the company’s share at a price of $22 per token, but was refused.
As a result, this led to capital outflow, a drop in the FTT rate and the subsequent bankruptcy of the exchange. The situation was aggravated by the fact that Binance announced plans to buy the platform, but quickly canceled the deal.
Arguments of the prosecution
The lawsuit alleges that Zhao’s statements and subsequent “manipulation” of the deal were part of Binance’s strategy to “squeeze out” its competitor:
The document also states that Zhao allegedly opposed the “regulatory efforts” of FTX and its former CEO Sam Bankman-Fried.
Source: Cryptocurrency
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