A new lawsuit alleges that Binance confiscated the funds of one of its former employees who was a community moderator who was also a user of the cryptocurrency exchange after a dispute between the two sides.

The lawsuit was filed on March 27 by Stephen Reynolds against Binance in the United States District Court for the Northern District of California, San Francisco.

In the complaint, Reynolds, represented by Ann Edwards, says that in mid-2017, he began providing services to support Binance’s online communications with English-speaking customers, including operating the community and media channels.

These services are said to have ended in December.

Reynolds claimed in the complaint that he was paid BNB as compensation during the time he worked.

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According to the complaint, Reynolds continued to use Binance to buy and sell cryptocurrency and continued to store the cryptocurrency in his Binance account.

A search for services related to Reynolds’ Binance indicates that he worked as a “team admin” for the “Binance community Slack” channel, according to a Reddit post from August 2017.

Reynolds was also cited as a “BNB official” in an article by CryptoCoreMedia from September 2017 about a vote by Binance to determine the list of new coins.

dispute point:

Reynolds claimed that in January 2018, Binance contacted him about a channel he ran on Telegram, asking him to delete it.

The complaint reads as follows:

Binance asked Reynolds to delete the group chat.

However, the app’s settings did not allow chats to be deleted once they were open to the public.

Days later, Binance called Reynolds again and asked him to remove any reference to Binance in the group chat and change the name of the chat.

Reynolds complied, according to the complaint.

H in the complaint also:

Later that day, Binance CEO Reynolds called, who demanded that the chat be deleted or all participants removed.

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Reynolds initially resisted but CZ immediately threatened him with legal and financial damages unless he complied.

Then, within minutes, Binance carried out its CEO’s threats.

Without Reynolds’ consent, Binance unilaterally withdrew what Reynolds owned and reduced his account to zero.

Reynolds’ account has been effectively frozen.

He was prevented from withdrawing any money from his account.

He couldn’t even log in with his username and password.

Reynolds tried to restore his account through Banance customer service, but his access was restricted.

Reynolds can no longer access his account, nor can he access the account where his coins are stored.

At the time, Reynolds’ Binance account held approximately $285,000 in cryptocurrency.

At the end of March 2018, Reynolds could regain access to his Binance account.

However, his account balance was zero.

According to the complaint, Reynolds alleged that Binance had, without consent or permission, confiscated all of the digital assets it owned and stored on the Binance platform.

In a later section of the complaint, Reynolds claimed that he asked for his money back during a face-to-face meeting with CZ.

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The complaint also alleged that several months later, around July 2018, Reynolds met “CZ” face-to-face at the TechCrunch conference in Zug, Switzerland.

Reynolds asks CZ to return his confiscated property, but CZ refuses.

The case before the court:

Reynolds, according to the complaint, asked the court to award him compensation for all injuries sustained as a result of the defendants’ abuse in an amount to be determined at trial but believed to be no less than $337,500.

This figure represents the amount of money Reynolds believes he would have made had he sold his account holdings on the date of the forfeiture.

Reynolds is also seeking punitive damages, statutory fees and attorneys’ fees.

Regarding the subject matter of jurisdiction and Reynolds’ standing to sue in the United States, the complaint states that as of 2017, Binance has purposefully directed its activities to residents of the United States of America by making its Binance.com website direct to users outside the United States and providing a platform to customers outside the United States. US to buy, sell and store digital assets on their Binance user account.

The “Binance US” platform, which operates as a legal firm separate from the parent Binance, including the trading engine.

However, according to the complaint, Reynolds alleged that Binance controls Binance US and uses Binance US as an agent and tool to continue serving Binance customers in the US.

Binance’s response:

Tell a Binance spokesperson Source That Reynolds first served as a member of the volunteer community, before being formally appointed as a community superintendent in September 2017.

Binance confirmed that the relationship ended in December, and that as part of the termination closing procedure, we asked Reynolds to transfer ownership and administrative control of all the platforms and chat groups he was overseeing to Binance.

But Reynolds refused to transfer control of the Telegram chat group to over 9,000 users which was the main group we were using to provide customer support to our users at the time, Binance Support.

He insisted on renaming the group and keeping all users for his personal use, even after repeated communication from Binance.

The representative claimed that the request was made to avoid possible misrepresentation or abuse on unethical or illegal grounds.

A Binance representative said “Reynolds refused” and told us, verbatim, “I don’t care.”

He insisted that the more than 9,000 users who joined the Binance support group be kept for his own personal and future use, and did not inform users of the reason for changing the group’s name or new purpose.

Then Binance admins were kicked out of the chat group, and our efforts to warn and protect the remaining users in the group were invalidated.

The representative went on to say:

CZ tried to ask Reynolds to do the right thing by abandoning the embezzled chat group or at least remove all Binance community users from the group to eliminate the risk of misrepresentation or fraud, but Reynolds refused.

It was also agreed with “Reynolds” that he would not prejudice his holdings in Binas on the condition that users in the embezzled chat group would be abandoned.

While serving as a moderator for the Binance community, Reynolds also exhibited other highly questionable behavior, including directing potential Binance customers to his personal LinkedIn account, and posting a job on Reddit claiming to provide private services to Binance users.

After the disaster in 2018, we wanted to sue Reynolds for damages but were unable to locate him.

The Binance representative also shared a portion of the chat, in which it emerged that Reynolds had said:

“I’m not going to, CZ, but I promise I’ll only have positive things to say about Binance.”

View the full version of the complaint below:

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