Recall that in late March, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against the largest cryptocurrency exchange in the world called Binance along with its head Changpen Zhao. According to the agency, the exchange allegedly provides access to cryptocurrency derivatives for US citizens, but this requires special registration with the CFTC.

Binance disagrees with such allegations. As Zhao pointed out on the same day, the exchange is using several tools to keep US citizens off the international trading platform. And such a thing is easy enough to believe, as Binance was among the first major trading platforms to introduce mandatory identity verification for all users. This was done in the summer of 2021.

In any case, there are plenty of people willing to file a lawsuit against the world’s main exchange. And at times, their demands sound strange.

What Binance is being sued for

This time, the claims against the trading platform are clearly structured around the notion that most cryptocurrencies can allegedly be recognised as unregistered securities. In a previous lawsuit against Voyager, the same law firm argued that prominent members of the blockchain industry who promote “unregistered securities” are liable for customer losses.


In fact, such wording is questionable. The fact is that cryptocurrency exchanges warn their own users about the volatility of digital assets, whose value can easily rise or fall. Accordingly, the use of trading platforms means that users agree to this condition.

Also, the terms of use of such trading platforms will probably indicate that the authorities may make changes to the classification of digital assets - which could also affect the industry. In other words, interacting with crypto-exchange users means that they are aware of what is happening and the risks that exist. The plaintiffs' current activity looks like an attempt to make money in an area that lacks any certainty and international regulation.


Based on the incident and the allegations, the plaintiffs’ side is demanding that Binance and three prominent members of the decentralized asset industry pay $1 billion in damages. On the list of defendants are NBA star Jimmy Butler, as well as bloggers Graham Stephan and Ben Armstrong, known under the pseudonym BitBoy Crypto.

In addition to the exchange and Changpen Zhao, the lawsuit also names US citizens. However, it also alleges that “millions” of other people may be behind the damages. The Moscowitz Law Firm and Boies Schiller Flexner also plan to involve more members of the Binance management in the lawsuit in the future.


It is also worth noting here that there is no single approach to classifying blockchain-based digital assets globally. Moreover, it can change even between two regulators in the same country. For example, the US Securities and Exchange Commission, with Gary Gensler at the helm, stubbornly argues that all cryptocurrencies can be considered securities other than Bitcoin.

Again, the Commodity Futures Trading Commission's recent lawsuit against cryptocurrency exchange Binance makes it clear that the agency sees crypto as a commodity. Accordingly, litigation over the alleged distribution of unregistered securities is hardly supported by this body.


Alas, the bad news doesn’t end there: a record number of crypto machines around the world were taken offline in March 2023. According to Cointelegraph journalists, 3,627 devices disappeared from the total number of devices in a single month.

As shown in the chart above, the number of cryptomats declined during the four months from September to March. The last month saw a record decline – and by a wide margin from February. As of today, there are a total of 33,738 cryptocurrencies installed worldwide.

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On the other hand, April interrupted the downward trend, with almost fifty new crypto machines already installed on the first of April alone. General Bytes, BitAccess and Genesis Coin are currently the market leaders in terms of devices.


We believe that this lawsuit is a futile attempt to make some money, as evidenced, among other things, by the huge amount of compensation claimed. It is important to understand that cryptocurrencies are not recognized as securities even in the US, and such lawsuits against cryptocurrency projects from regulators mean nothing, because judges will decide on this one way or another.

In addition, as the example of blockchain platform Ripple and token XRP shows, the US Securities and Exchange Commission has no problem proving its case. As a reminder, this proceeding has been ongoing since December 2020, so it is not certain that cryptocurrencies will actually be recognised as securities. Doing such a thing in court for the Commission would have to be done for each coin separately.