Binance Faces New Class Action Lawsuit

Binance and Changpeng Zhao Accused of Facilitating Money Laundering in New U.S. Lawsuit

Binance– In a significant legal development, Binance and its founder Changpeng Zhao are facing a fresh class action lawsuit filed in the U.S. Western District Court of Washington. The lawsuit accuses the world’s largest cryptocurrency exchange of enabling widespread money laundering and systematically violating U.S. financial regulations. This legal action adds to the mounting challenges, which has already faced several regulatory hurdles in recent months.

The lawsuit was brought forward by three former users of the exchange—Philip Martin, Natalie Tang, and Yatin Khanna—who filed the complaint last Friday. They allege that Binance’s negligent compliance practices allowed criminals to exploit the platform for laundering stolen cryptocurrencies. The plaintiffs argue that these actions have resulted in significant financial losses for U.S. users.

Binance Operated as an Unlicensed Money-Transmitting Business, Lawsuit Claims

According to the complaint, under the leadership of Changpeng Zhao, operated as an unlicensed money-transmitting business, deliberately ignoring U.S. anti-money laundering (AML) requirements. The plaintiffs assert that facilitated transactions that helped bad actors obscure the origins of illicit funds, thereby turning the exchange into a haven for criminal activity.

Rapid Growth Tied to Regulatory Evasion, Say Plaintiffs

The lawsuit further claims that Binance’s rapid ascent to becoming the world’s largest crypto exchange was fueled by its deliberate evasion of U.S. regulations. The plaintiffs allege that if had complied with these regulations, its access to the lucrative American market would have been significantly restricted.

Zhao Accused of Prioritizing Profits Over Legal Compliance

The plaintiffs also allege that Zhao, who founded Binance in 2017, prioritized profits over adherence to legal standards. They claim that U.S. users were encouraged to bypass the platform’s minimal compliance checks, creating an environment ripe for money laundering activities.

AML Failures Led to Criminal Activity, Say Plaintiffs

The failure to implement robust AML and Know Your Customer (KYC) protocols is at the core of the plaintiffs’ accusations. They claim that Binance’s lax approach turned the exchange into a hub for laundering cryptocurrencies, often stolen through hacks and other illicit means.

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