Binance Ex-CEO CZ to Undergo Deposition in $1 Billion Cryptocurrency Lawsuit

Binance Ex-CEO CZ to Undergo Deposition in $1 Billion Cryptocurrency Lawsuit

Lead Attorney Initiates Legal Move

Lead attorney Adam Moskowitz, renowned for his involvement in civil cases related to crypto companies, has submitted a motion to depose former Binance CEO Changpeng “CZ” Zhao.

This legal move, filed on December 8th in the United States District Court for the Southern District of Florida Miami Division, is a significant development in a $1 billion lawsuit against Zhao, Binance, and various crypto influencers. The lawsuit had been put on hold by court order back in August.

Importance of Zhao’s Testimony

Moskowitz emphasized the importance of Zhao’s testimony, stating that it is “crucial to the claims and defenses of all parties” in the ongoing legal battle.

His law firm has a track record of representing clients in cases against prominent crypto firms and related entities.

Previously, he served as counsel for victims of FTX’s collapse in a lawsuit targeting celebrities who had endorsed the crypto exchange.

Additionally, he was involved in a suit alleging that investors suffered losses due to soccer star Cristiano Ronaldo’s promotion of Binance’s nonfungible tokens.

Discovery Process Postponed

In typical cases where CZ is named as a defendant, a notice for his deposition would be sent. However, in this instance, both parties have agreed to postpone the discovery process until the judge makes a ruling on Binance’s request to litigate their class action before the AAA arbitration association.

Moskowitz explained, “Regardless of where we end up, CZ’s testimony will be crucial for all parties.”

Legal Implications of Zhao’s Sentencing

The motion to depose Zhao was prompted by a Washington judge’s order for him to remain in the United States until his sentencing in February 2024.

In November, U.S. authorities announced a $4.3 billion settlement with Binance, leading to CZ stepping down as CEO and pleading guilty to one felony charge.

Moskowitz acknowledged the uncertainty surrounding Zhao’s potential sentence, stating, “We have no idea how long CZ will be sentenced to prison, could be 60 years or no years.”

He emphasized that obtaining a deposition from prison, if necessary, would be challenging.

Moskowitz also noted that Zhao’s guilty plea to federal charges, which implicated a lack of safeguards during his tenure as Binance CEO, could bolster the plaintiffs’ claims in the civil suit.

SEC Litigation and Allegations

The lawsuit alleges that Binance promoted unregistered securities, although the U.S. Securities and Exchange Commission (SEC) was not part of the settlement with Zhao, Binance, and the government.

Regarding the ongoing SEC litigation against CZ and Binance, Moskowitz pointed out, “The SEC certainly has not slowed down their own litigation vs. CZ and Binance and still allege that the BNB token is an unregistered security, so there are $4 billion in alleged values, that really could be zero in one minute.”

Uncertain Outcome

The outcome of Moskowitz’s motion remains uncertain, given that Zhao is no longer the CEO of Binance and has stepped back from its leadership.

At the time of publication, Cointelegraph had not received a response from Binance.

Leave a Reply

Your email address will not be published. Required fields are marked *