The former CEO of Binance was called for a deposition by the Moskowitz Law Firm, which represented numerous cryptocurrency investors in class-action lawsuits and highlighted his "unique knowledge" of issues.
Adam Moskowitz, the lead counsel in several civil actions against cryptocurrency companies, submitted a request to depose former Binance CEO Changpeng "CZ" Zhao.
Moskowitz stated that Zhao's testimony will be "crucial to the claims and defenses of all parties" in a Dec. 8 filing in the United States District Court for the Southern District of Florida Miami Division. The request was submitted by the legal company in connection with a $1 billion lawsuit that was halted by a judge in August against Zhao, Binance, and cryptocurrency influencers.
Moskowitz and his firm have defended a number of customers in legal battles against well-known cryptocurrency companies and associated parties. He represented numerous FTX plaintiffs in a case against celebrities endorsing the cryptocurrency exchange and another alleging that investors lost money as a result of soccer player Cristiano Ronaldo promoting Binance's nonfungible tokens.
“Typically, because CZ is a named defendant, we would just send a notice for his deposition,” Moskowitz told Cointelegraph. “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, according to the crypto attorney, was made in response to a Washington judge's order that Zhao stay in the US until his sentence in February 2024. Following a $4.3 billion settlement with Binance, which was revealed in November, CZ resigned as CEO and entered a guilty plea to a single felony charge.
“[W]e have no idea how long CZ will be sentenced to prison, could be 60 years or no years, we were certainly not involved in the discussions between CZ and the government,” said Moskowitz. “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.”
📌 I’m sure Richard is a great asset at Binance but CZ did have the “je ne sais quoi” vibe, miss that mfer posting his satire
— CryptoAlerts365 (@CryptoAlerts365) December 4, 2023
According to Moskowitz, some of the plaintiffs' arguments in the civil lawsuit may be supported by Zhao's guilty plea to federal charges alleging that there were inadequate safeguards in place while he served as CEO of Binance. Although the U.S. Securities and Exchange Commission, which regulates securities, was not involved in the settlement with Zhao, Binance, or the government, the case claimed that Binance promoted unregistered securities.
He added:
“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.”
Given that Zhao has resigned as CEO of Binance and stepped back from the company's leadership, it is uncertain if a judge will allow Moskowitz's motion.
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