Binance and its former CEO, “CZ,” are facing a new legal challenge in the form of a lawsuit alleging their involvement in money laundering.
A class action lawsuit was filed on August 16, 2023, in the U.S. District Court for the Western District of Washington, Seattle, holding Binance liable for its failure to prevent financial fraud that resulted in significant losses for three American cryptocurrency entrepreneurs.
Allegations regarding Binance’s role in money laundering:
The plaintiffs allege that hackers stole their cryptocurrency and transferred the stolen proceeds to Binance accounts for the purpose of camouflaging them.
They claim that the company played a crucial role in concealing the connection between the digital ledger and their stolen assets, making it impossible to trace them.
Accordingly, the plaintiffs assert that Binance’s involvement prevented the recovery of their assets.
The legal action further asserts that the transparency of blockchain technology would have allowed victims to trace their assets had it not been for Binance’s involvement.
The plaintiffs accuse the platform of violating the Racketeer Influenced Corrupt Organizations Act (RICO) by facilitating money laundering as part of its operations, causing them significant financial damage.
In addition, Binance is facing another lawsuit filed by the U.S. Securities and Exchange Commission, which includes allegations of misleading practices such as manipulating market controls and inflating trading volumes.
The court has allowed most of these charges to proceed, increasing the legal pressure on Binance.
As the class action proceeds, its outcome could be crucial for Binance and the cryptocurrency community at large, particularly regarding how exchanges manage stolen digital assets and their responsibilities in preventing illegal activities.
