The United States Supreme Court ruled today that the class action lawsuit against Binance will proceed. The lawsuit was filed by former investors who accused the exchange of illegally selling unregistered tokens.
Binance argues that the lawsuit is invalid because the United States has no jurisdiction over the matter. However, the Supreme Court rejected this argument today.
US Supreme Court Rejects Binance’s Argument
Binance, one of the world’s leading cryptocurrency exchanges, is currently facing many legal issues. In the UK, the exchange is being accused of illegally firing an employee after reporting misconduct. However, the current class action lawsuit was filed by consumers in the United States.
The lawsuit claims that Binance failed to warn users about the significant risks of investing in certain low-cap tokens. According to reportsBinance asserts that these allegations are baseless and that securities laws do not apply because the exchange is not headquartered in the United States. However, the Supreme Court has a different view.
“Recent technological innovations have enabled investors to participate in foreign financial markets with greater ease and efficiency. This connectivity and accessibility not only increases market size but also increases the number of US persons trading on foreign exchanges,” Binance stated in its appeal.
Changpeng “CZ” Zhao, former CEO of Binance, is the key person in this appeal to the Supreme Court. CZ is no longer an official representative of the company, but remains involved in these proceedings; He was detained on related charges nearly a year ago.
Indeed, the Supreme Court’s ruling here could affect Binance in several ways. US federal regulators have previously prosecuted the company on a number of criminal charges, but today’s appeal involves a civil matter. Previous users who purchased ELF, EOS, FUN, ICX, OMG, QSP or TRX after 2017 are qualified Join this class action lawsuit.
Although the US federal government has made a notable move towards cryptocurrencies, this has not necessarily affected the judiciary. Last month, the Supreme Court also allowed a shareholder lawsuit against Nvidia to proceed, which is quite similar to Binance.
Now that these shareholders have received their consent, the exchange’s chances in this lawsuit are not very positive. In addition, because this is only a civil case, the possibility of receiving leniency from the upcoming President Trump seems impossible.
