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Artwork by Binance (Photo: Kanchanara/Unsplash)

Previously, after the US Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance, the world’s largest cryptocurrency exchange is now facing another high-profile legal challenge.

On March 31, 2023, law firm Moskowitz and Boies Schiller Flexner, home to super lawyer David Boies, filed a class action lawsuit against Binance, its founder Changpeng Zhao (CZ), and several others.

Founder and managing partner of the law firm Musikitz, Adam Moskowitz discussed the lawsuit shortly after the filing, filed in the Southern District of Florida. The law firms previously teamed up to file a class action lawsuit against Voyager, which later went bankrupt, and two other lawsuits related to the FTX fiasco.

The new action against Binance rests on the same basic claim that the exchange trades cryptocurrencies that are in fact unregistered securities, and social media influencers paid by Binance illegally promote these instruments.

“This is a classic example of a centralized exchange, which promotes the sale of unregistered securities,” alleges the complaint, cited by Yahoo Finance, Wednesday (04/05/2023).

The lawsuit seeks compensation of over $1 billion or the equivalent of IDR 14.9 trillion (assuming an exchange rate of IDR 14,995 per US dollar, in total, from the Binance company and influencers.

“We have been investigating the same unregistered security issues against Binance for over a year,” Moskowitz said.

The complaint says that under relevant state securities laws, anyone who purchases unregistered securities is entitled to damages equal to any losses suffered.

The defendants have no obligation to prove that they were deceived or even influenced by social media posts or advertisements touting the play, only that they saw it.

As Moskowitz points out, the law clearly states that if an influencer promotes an unregistered security and has a financial interest in doing so, that influencer may be liable to anyone purchasing the asset. The exchange facilitating the trade will also be liable.

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