Nir Lahav, an investor from California, along with several others, files a lawsuit against Binance in the Northern California District Court in October 2023. Allegations include Binance’s unfair competition, attempts to monopolize the market, and actions undermining FTX.
Here is the timeline of Binance’s actions that led to the termination of FTX:
Early November 2022:
- Alameda Research, FTX’s “sister company”, experiences a leak of its balance sheet.
- The relationship between Alameda and FTX becomes a focal point, as it’s seen as a significant factor affecting FTX’s financial health.
- CZ, Binance’s founder, publicly announces a massive sale of FTX’s FTT tokens.
- The price of FTT subsequently plummets from $23.15 to $3.14.
- This drastic price drop pushes FTX towards the brink of bankruptcy, causing chaos within the exchange’s leadership.
- Plaintiffs argue that Binance had premeditatedly sold FTT even before CZ’s tweet and that the announcement was strategically timed to depress FTT’s market price further.
- The lawsuit posits that CZ’s actions were part of a broader, malicious strategy to weaken FTX and solidify Binance’s market position.
- The group of investors begins gathering evidence of financial damages and court costs, anticipating that thousands might join their class-action lawsuit against Binance.