"I could not keep my head up with friends or family if I do not escalate this"
Really? As you noted, you're many levels below the CTO. Why would the CTO's decision affect your ability to be in harmony with your friends & family? This indicates you have far too much emotional attachment to your work. Remember, you work for a business and at the end of the day that business is going to make decisions irrespective of how you feel about them. You should document and communicate your concerns in a non-combative way and then move on. Invite the CTO for a coffee to talk over the decision from their perspective, again not so you can combat them on it but so you can understand where they are coming from. If you can't come to understand and accept their decision and/or if you truly believe the CTO is immoral then it's time for you to find another job, fighting them in this one will very likely get you nowhere.