- Crypto investors are blaming Binance and its ex-CEO for failing to stop malicious actors from withdrawing funds from the exchange
- The investors claim that the exchange facilitated money laundering
- Some in the crypto space doubt whether the investors will be able to prove the accusations
Three crypto investors have filed a lawsuit claiming that crypto exchange Binance and its former CEO Changpeng Zhao contributed to their losing their crypto to malicious actors. The three argue that the two entities failed to stop malicious actors from withdrawing funds they had stolen from them. Some in the crypto community have expressed skepticism on whether the investors will be able to back up their claims, with Binance likely to argue that their negligence was to blame for the loss.
Suing Binance for Funds Lost Since 2020
In a court filing, the investors noted that cryptocurrency transactions are traceable and permanently recorded on the blockchain. They added that this helps law enforcement agencies to follow the trail of transactions in case of theft.
The investors, however, noted that the exchange and its former CEO failed to implement and adhere to necessary safeguards and laws to prevent hackers and scammers from withdrawing stolen funds making it hard for law enforcement agencies to recover funds.
They disclosed that they’re suing Binance and CZ “on behalf of themselves and all persons or entities in the United States whose cryptocurrency was” stolen and sent to Binance “between August 16, 2020 and the date of judgment.”
The investors want Binance and CZ to take responsibility for their monetary damages “restitution; injunctive relief […] attorneys’ and expert fees,” among others.
Binance Pays Brazilian Regulators
Binance was recently fined $4.3 billion for violating the United States Bank Secrecy Act among other laws. The charges also saw its CEO step down. The exchange also recently paid close to $2 million to settle a four-year probe into its derivatives offering by Brazilian authorities.
Binance has in the past denied responsibility for a hacked account where a user claimed to have lost approximately $1 million. Last year, a United States court exempted Uniswap from being liable for users’ losses from scam tokens.
Going by previous court rulings, it’s unlikely that the crypto investors will win the case.
