Could this be the legal twist of the year? The 2nd US Circuit Court of Appeals in Manhattan has brought a lawsuit against Binance, the world’s top cryptocurrency exchange, back to life. Investors claim that Binance violated US securities laws by selling unregistered tokens, resulting in significant losses for them.
Investors argue that Binance’s sale of unregistered tokens caused financial losses. The court categorizes token purchases in the US under US securities laws, as they can’t be canceled once bought. Binance disagrees, stating that these claims fall outside the US jurisdiction.
Brace yourself for a high-stakes showdown with global implications.
Court Verdict: 3-0 Against Binance
According to the Reuters report, the appeals court, in a unanimous 3-0 decision, upheld the investors’ claims, asserting that domestic securities laws were applicable. The court reasoned that once investors paid for the tokens, their purchases became irreversible within the United States. Notably, the court highlighted Binance’s use of domestic Amazon computer servers to host its platform as a crucial factor supporting this decision.
The lawsuit focuses on seven tokens—ELF, EOS, FUN, ICX, OMG, QSP, and TRX—bought on Binance from 2017 onwards, leading to significant value drops. Investors accuse Binance of not warning them about associated risks as they seek to recover their initial investments.
Also Read: SEC’s lawsuit against Binance takes toll on its business, revenues and trust!
Binance‘s Defense
Binance, operating outside the US, claims that US securities rules don’t apply. The lawsuit challenges this, bringing the alleged violations and Binance’s responsibility under US law into question. Binance cites a 2010 Supreme Court ruling to limit US securities laws’ application outside the country.
Binance and its legal team haven’t commented yet. Jordan Goldstein, representing the plaintiffs, welcomes the court’s recognition of their case’s strength.
This legal battle is separate from Binance’s recent admission of guilt and substantial penalties for violating anti-money laundering laws. Binance’s founder, Changpeng Zhao, admitted to money laundering charges, stepping down as CEO, with sentencing set for April 30. The ongoing case is titled Lee et al v Binance et al, currently before the 2nd US Circuit Court of Appeals and the US District Court, Southern District of New York.
Global Scrutiny
Beyond the US, Binance faces scrutiny from the Central Bank of Nigeria (CBN). The exchange excluded the Nigerian naira from its peer-to-peer trading platform. Despite reports of fines, Bayo Onanuga, a Special Adviser to the Nigerian President, officially denies such claims.
Did You Know? Binance to cease all Nigerian naira transactions by March 8
This news is republished from another source.
