Miami Heat basketball star Jimmy Butler and YouTube influencer Ben Armstrong have agreed to pay $340,000 to settle a lawsuit accusing them of helping deceive investors into buying unregistered securities from Binance Holdings Limited, the world’s largest cryptocurrency exchange. The settlement, which was filed in Miami federal court on Monday, comes after months of negotiations involving a mediator, former Miami-Dade Circuit Judge Michael Hanzman.
Both Armstrong and Butler have denied any wrongdoing as part of the settlement, according to court records. U.S. District Judge Roy Altman will now review the agreement and decide whether to preliminarily approve it. If approved, a final hearing will be held where buyers of Binance’s unregistered securities can voice their opinions on the settlement.
The lawsuit, filed last year against Butler, Armstrong (known as BitBoy Crypto), Binance, and co-founder Changpeng Zhao, alleged that they lured customers into purchasing cryptocurrencies and tokens, including Binance’s native BNB token, which were actually unregistered securities in violation of US law. Binance Holdings Limited and Zhao previously pleaded guilty to anti-money laundering and U.S. sanctions violations in a $4 million settlement with the Justice Department.
In a separate case, Austin Michael Taylor, the founder of the cryptocurrency project CluCoin and owner of Aventura-based company CLU LLC, pleaded guilty to wire fraud in Miami federal court. Taylor, 40, faces up to 20 years in prison at his sentencing on Oct. 31 for transferring $1,140,000 in CluCoin investor funds to his personal account.
Prosecutors alleged that Taylor used his large social media following to generate interest in a digital token named “CLU” and promoted its Initial Coin Offering at a fundraising event. He produced a white paper to attract investors, highlighting the offering’s charitable focus. Taylor later shifted CluCoin towards new ventures, including non-fungible tokens, a computer game, and a metaverse platform.
The settlement between Butler, Armstrong, and the investors affected by the Binance lawsuit marks a significant development in the ongoing legal battles surrounding cryptocurrency investments. As the crypto industry continues to evolve and attract more attention from regulators, cases like these serve as a reminder of the importance of transparency and compliance with securities laws.
The outcome of these cases will likely have implications for how celebrities and influencers engage with cryptocurrency projects in the future. It underscores the need for individuals and companies operating in the crypto space to conduct thorough due diligence and ensure compliance with relevant regulations to avoid legal repercussions.
