KEY POINTS
- Zhao stepped down as the CEO of Binance last month
- The class-action lawsuit against Zhao was initiated in March
- The billion-dollar class-action lawsuit, in part, concerns Binance's BUSD stablecoin and BNB token
Changpeng Zhao, the founder and former CEO of Binance, could be deposed in a billion-dollar class-action lawsuit. The latest development comes a few days after a court sided with the U.S. Department of Justice and prohibited the crypto mogul from leaving the U.S. until his sentencing.
Zhao, also known as CZ, is a defendant in the class-action lawsuit, which seeks over $1 billion in damages.
He faces up to 18 months in prison after pleading guilty to one count of violating the Bank Secrecy Act last month and his sentencing is scheduled for February.
Meanwhile, Adam Moskowitz, a renowned lawyer who has been the lead attorney in a myriad of civil cases involving cryptocurrency firms, filed a motion to depose the Binance founder and former CEO.
Zhao's testimony would be "crucial to the claims and defenses of all parties" involved, a filing by Moskowitz law firm in the U.S. District Court for the Southern District of Flordia Miami Division read.
"Typically, because CZ is a named defendant, we would just send a notice for his deposition," Moskowitz said. "In our case, we all agreed to wait on discovery, until the judge rules on Binance's demand that we litigate our class action before the AAA arbitration association. Regardless [of] where we end up, CZ's testimony will be crucial for all parties."
The filing came after a Washington judge ordered Zhao to stay in the U.S. until his sentencing.
"We have no idea how long CZ will be sentenced to prison, [it] could be 60 years or no years ... If he gets no jail time, he certainly flees back to UAE. If he gets jail time, it is not easy to arrange and require a deposition from prison," Moskowitz said.
The Sizemore vs. Zhao class-action lawsuit, initiated in March, alleged that the then-Binance CEO and other parties helped the crypto exchange platform offer unregistered securities.
The lawsuit, which in part, concerned Binance's BUSD stablecoin and BNB token, initially cited statements by the U.S. Securities and Exchange Commission about BUSD in February and actions of the Commodity and Futures Trade Commission (CFTC) in March.
Zhao stepped down as the CEO of Binance last month after the crypto exchange platform entered into a settlement agreement with the DOJ and other regulators and agreed to pay $4.3 billion in fines.
