Crypto: Binance and CZ Faced With a Money Laundering Complaint

Who would have thought that Binance, after paying more than 4 billion dollars in fines to the DOJ and seeing its CEO Changpeng Zhao (CZ) imprisoned, would still be under judicial scrutiny? And yet, that’s the case. Binance and CZ are once again being accused in a class-action lawsuit, where investors hold them responsible for the loss of their stolen cryptos, claiming that the platform facilitated the laundering of funds.

Binance, still in a bad position

Everything is not rosy for the world’s leading crypto exchange despite the fact that the 56th project has entered Binance’s Launchpool. The new class-action lawsuit filed against this company and CZ highlights the dubious practices of the crypto exchange. The plaintiffs accuse Binance of complicity in laundering their stolen funds, a serious offense that could fall under the RICO (Racketeer Influenced and Corrupt Organizations) Act.

According to them, without the possibility of laundering their cryptos on Binance, the thieves would have been traced on the blockchain, allowing the authorities to track them down.

The matter doesn’t stop there. Bill Hughes, a lawyer specializing in regulatory issues at Consensys, expresses doubts about the plaintiffs’ ability to prove these accusations. However, he acknowledges that this case could have significant consequences for the crypto industry if it goes to trial.

“If this case goes all the way, it’s not just Binance and CZ on the defendant’s bench, but the very effectiveness of blockchain analysis and asset recovery,” warns Hughes.

The stakes are therefore enormous for Binance, which might find itself defending not only its practices but also the credibility of a whole segment of the crypto industry.

• 4.3 billion dollars: the fine paid by Binance in November 2023.
• 4 months: the prison sentence of CZ.
• 3 investors: the plaintiffs behind this new class-action lawsuit.

A crypto exchange under constant pressure

In addition to this new lawsuit, Binance is facing other legal troubles, notably with the SEC, which has just amended its complaint. The agency accuses the exchange and CZ of lying about its market surveillance controls and artificially inflating trading volumes.

This case, which began in June 2023, is still ongoing and could prove just as devastating for the crypto exchange’s reputation.

The impact of these cases on Binance and the industry is undeniable. The platform, once regarded as the undisputed titan of the crypto market, now finds itself in a delicate position.

If the class-action lawsuit goes to trial, it could not only shake investor confidence in the issuer of BNB but also call into question the integrity of blockchain transactions, a cornerstone of the crypto ecosystem.

Bill Hughes doesn’t mince words: “The things that Binance would be incentivized to say about tracing and recovery [of assets] – it’s a really tough position to hold, honestly, if you care about the industry.”

A quote that aptly summarizes the thorny situation in which the crypto exchange finds itself.

As Binance is already under several investigations, this new lawsuit could be the final blow, especially in a context where Nicolas Maduro is tightening the screws on Binance and X after a contested election.