- Binance under scrutiny again after a class action lawsuit against it was filed in Washington
- If the case goes ahead, blockchain analytics could be on trial
Binance and its former CEO, Changpeng Zhao (CZ), are embroiled in a legal battle yet again. This time, they are facing a new class action lawsuit, with the plaintiffs – Philip Martin, Natalie Tang, and Yatin Khanna – alleging that the exchange was used to launder cryptocurrencies stolen from them
According to them, Binance played the role of a “getaway car” and was involved in the money laundering process. This, in violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act.
The lawsuit, filed before the U.S. Western District Court of Washington, also claimed that Binance was used by crypto thieves to “remove the connection between the ledger and their digital assets.”
Blockchain on trial?
As expected, many in the crypto-community had a lot to say as far as the aforementioned lawsuit is concerned. Bill Hughes, for instance, a lawyer at Consenys, had this to say about the allegations in question –
“Whether they can satisfy their burden on this key allegation is dubious, if you ask me…”
That’s not all though. Hughes also argued that this lawsuit is simply another effort to capitalize on the government’s recent prosecution of Binance and other crypto-entities. In fact, he said that the lawsuit is a “natural, predictable follow-on civil action.”
What would be a victory for Binance in this case though? Well, the case being dismissed would be a start, yes. However, according to Hughes, it would put Binance in a “difficult position” if the case goes to trial and enters the discovery and deposition phase.
He added,
“The efficacy of blockchain analytics itself and on-chain asset recovery will be on trial.”
More trouble on the horizon?
This lawsuit is the latest in a growing list of legal troubles for Binance and CZ, both of whom have been under increasing regulatory scrutiny worldwide.
In fact, CZ was convicted of violating money laundering laws, resulting in a four-month prison sentence and billions in fines for Binance. These past infractions, combined with ongoing global investigations, paint a troubling picture for the world’s largest cryptocurrency exchange.
The rise in regulatory scrutiny and legal actions against Binance may signal a broader crackdown on crypto-entities. Especially as governments and regulatory bodies intensify their efforts to regulate the rapidly evolving digital assets market.
This heightened focus on compliance and anti-money laundering (AML) practices could accelerate the number of lawsuits against other cryptocurrency platforms, as regulators seek to impose greater accountability within the industry.