In a recent legal development, attorney Adam Moskowitz, known for his involvement in civil cases related to cryptocurrency firms, has taken a significant step in the ongoing legal saga involving former Binance CEO Changpeng “CZ” Zhao. A motion filed on December 8 in the United States District Court for the Southern District of Florida, Miami Division, seeks a deposition from Changpeng Zhao.
Former Binance CEO set for deposition in a $1 billion lawsuit
The motion highlights the crucial role his testimony would play in the $1 billion lawsuit against Zhao, Binance, and certain crypto influencers. The lawsuit had been ordered to stay in August by a court. Moskowitz, along with his firm, has been actively representing clients in cases against notable crypto entities. Notably, he played a key role in a lawsuit related to the collapse of FTX, representing victims and targeting celebrities who had endorsed the crypto exchange.
Additionally, he was involved in a suit alleging losses by investors due to soccer star Cristiano Ronaldo promoting Binance’s nonfungible tokens. The decision to file the deposition motion was influenced by a Washington judge’s instruction for Zhao to remain in the U.S. until his sentencing scheduled for February 2024. In a significant turn of events in November, U.S. authorities announced a $4.3 billion settlement with Binance, resulting in CZ stepping down as CEO and pleading guilty to a felony charge.
Moskowitz sheds light on the uncertainties surrounding Zhao’s potential prison sentence, emphasizing the unknown duration. If Zhao receives no jail time, there is a possibility of him returning to the United Arab Emirates. On the contrary, if imprisonment is imposed, arranging a deposition from prison becomes a complex and challenging process. The attorney highlights that Zhao’s guilty plea to federal charges, specifically addressing the lack of safeguards during his tenure as Binance CEO, could provide support to some of the claims made by plaintiffs in the ongoing civil suit.
The civil case alleges that Binance promoted unregistered securities, even though the U.S. Securities and Exchange Commission (SEC), the regulatory body overseeing securities, was not directly involved in the settlement with Zhao, Binance, and the government. Moskowitz draws attention to the SEC’s continued litigation against Zhao and Binance, asserting that the SEC still maintains allegations that the BNB token, associated with Binance, is an unregistered security.
This brings into question the alleged $4 billion in values, with Moskowitz suggesting that this valuation could potentially diminish to zero in a short span. However, uncertainties arise regarding the court’s response to Moskowitz’s motion, given that Zhao is no longer the CEO of Binance and has distanced himself from its leadership. The unfolding legal proceedings will determine whether the judge grants the motion, adding another layer of complexity to the legal landscape surrounding Binance and its former CEO, CZ Zhao.
The legal developments surrounding Binance and its former CEO, CZ Zhao, continue to evolve, with significant implications for ongoing civil litigation and regulatory actions. As the legal battles progress, the crypto community and legal observers alike will be closely watching for outcomes that could shape the future regulatory environment for cryptocurrency entities.