CZ and Binance Hit with a New Lawsuit Over Alleged Crypto Laundering
- After a $4.3 billion settlement and the CEO's resignation, Binance now faces a new lawsuit accusing it of violating the RICO Act by facilitating money laundering.
- Three crypto investors are suing Binance, claiming the exchange failed to prevent money laundering, making it impossible for them to recover their stolen assets.
- A class-action lawsuit against Binance could have major implications for the crypto world.
Binance and its former CEO, Changpeng “CZ” Zhao, are being sued by three crypto investors in a new class-action lawsuit. The investors claim they couldn't recover their stolen assets because Binance didn't do enough to stop money laundering.
Filed on August 16 in the United States District Court for the Western District of Washington, Seattle, the lawsuit alleges that the plaintiffs' crypto was stolen and transferred to Binance by the thieves to hide the trail, making the assets untraceable.
This lawsuit comes after Binance's earlier legal issues, including a $4.3 billion settlement with the US Justice Department and CZ stepping down after admitting to breaking US money laundering laws. Legal experts believe this case could greatly impact the crypto industry, especially in areas like blockchain analytics and recovering assets on the blockchain.
The plaintiffs claimed that a key feature of crypto transactions is that they create a permanent record on the blockchain, making them always traceable. They argued that without a platform like Binance.com to launder crypto, criminals who steal someone else's crypto could be tracked down by authorities through the blockchain.
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The lawsuit also alleges that Binance played a crucial role in money laundering, violating the Racketeer Influenced and Corrupt Organizations (RICO) Act.
Meanwhile, Richard Teng, who took over as CEO of Binance from founder Changpeng "CZ" Zhao, mentioned in an interview that the crypto exchange is financially strong and isn't planning an IPO. He also said that CZ, currently serving a four-month prison sentence, is no longer involved in the company's operations, though CZ's partner, Ye Hi, still is.
Teng further emphasized the importance of making amends, saying, "We acknowledge our past mistakes and have paid a significant penalty for them."
Edited by Harshajit Sarmah
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