January 16, 2025<\/p>\n\n\n\n
By Our Correspondent<\/p>\n\n\n\n
The United States Supreme Court on Monday rejected an attempt by Binance and its founder, Changpeng Zhao, to evade a lawsuit initiated by investors. These investors have accused the leading cryptocurrency exchange of unlawfully selling unregistered tokens that subsequently depreciated significantly in value.<\/p>\n\n\n\n
The justices opted not to review an appeal from Binance and Zhao regarding a lower court’s ruling that allowed the proposed class action to move forward.<\/p>\n\n\n\n
The 2nd US Circuit Court of Appeals in Manhattan determined that domestic securities laws could be applicable, even though Binance is not a US-based company, as the purchase of tokens became irrevocable within the United States once investors completed their transactions.<\/p>\n\n\n\n
In its ruling from March 2024, the 2nd Circuit referenced Binance’s utilization of domestic servers provided by Amazon as a basis for permitting the lawsuit to proceed. Founded in China, Binance contends that it should not be subject to US securities regulations.<\/p>\n\n\n\n
Chief Executive Richard Teng stated in December that Binance has not yet made a decision regarding its headquarters, despite previous indications that a resolution was forthcoming.<\/p>\n\n\n\n
Investors who acquired ELF, EOS, FUN, ICX, OMG, QSP, and TRX tokens through Binance since 2017 have alleged that the exchange failed to adequately inform them about the “significant risks” associated with these tokens, and they are seeking to recover their investments through the class action.<\/p>\n\n\n\n
Binance has maintained that US securities laws do not apply to it, citing its location outside the United States. The exchange referenced the 2010 Supreme Court case, Morrison v National Australia Bank, which restricted the extraterritorial application of these laws.<\/p>\n\n\n\n
In its appeal to the Supreme Court, Binance contended that the 2nd Circuit incorrectly interpreted the Morrison decision by permitting liability at various stages of securities transactions and across multiple jurisdictions.<\/p>\n\n\n\n
The exchange argued that this effectively reinstated a standard that the Supreme Court has previously dismissed, which allowed for the application of domestic securities laws if the conduct related to a transaction occurred or if the transaction had repercussions within the United States.<\/p>\n\n\n\n
Binance further asserted that its appeal raised “a question of global significance for financial markets: whether, and under what circumstances, US securities laws apply to foreign trading platforms such as Binance.com.”<\/p>\n\n\n\n
This case is distinct from Binance’s guilty plea in November 2023, which resulted in a penalty exceeding US$4.3 billion for breaching federal anti-money-laundering and sanctions regulations.<\/p>\n\n\n\n
Zhao received a four-month prison sentence in a related matter and was released in September.<\/p>\n\n\n\n
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January 16, 2025 By Our Correspondent The United States Supreme Court on Monday rejected an attempt by Binance and its founder, Changpeng Zhao, to evade a lawsuit initiated by investors. These investors have accused the leading cryptocurrency exchange of unlawfully selling unregistered tokens that subsequently depreciated significantly in value. The justices opted not to review […]<\/p>\n","protected":false},"author":4,"featured_media":7017,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-7015","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uncategorized"},"yoast_head":"\n