The US Supreme Court ruled today that a class action lawsuit against Binance will proceed. The suit is filed by former investors who accused the exchange of illegally selling unregistered tokens.
Binance claimed that the lawsuit was invalid as the US did not have jurisdiction over the issue. However, the Supreme Court rejected this argument today.
US Supreme Court Spurns Binance
Binance, one of the world’s leading crypto exchanges, is currently facing several legal battles. In the UK, the exchange is facing allegations of unlawfully terminating an employee after whistleblowing on misconduct. However, the current class-action lawsuit in question is filed by consumers in the US.
It claims that Binance failed to warn users about the significant risks of investing in certain low-cap tokens. According to reports, Binance claims these accusations are meritless and the securities law is inapplicable as the exchange is not located in the US. However, the Supreme Court thinks otherwise.
“Recent innovations in technology have empowered investors to participate in foreign financial markets with greater ease and efficiency. This interconnectivity and ease of access has increased not only the size of the market for trades but also the number of Americans who trade on foreign exchanges,” Binance claimed in its petition.
Changpeng “CZ” Zhao, the former CEO of Binance, was a major proponent of this Supreme Court appeal. CZ is no longer an official representative of the company. However, he still has an investment in these proceedings; he was jailed on related charges nearly a year ago.
Indeed, the Supreme Court’s ruling here could impact Binance in several ways. US federal regulators have already pursued the company on several criminal charges, but today’s appeal concerns a civil matter. Former users who bought ELF, EOS, FUN, ICX, OMG, QSP, or TRX after 2017 are eligible to join this class action suit.
Although the US federal government has taken a noticeable swing towards crypto, this doesn’t necessarily impact the judiciary. Last month, the Supreme Court also allowed a shareholder lawsuit against Nvidia to proceed in an episode that parallels Binance.
Now that these shareholders received the green light, the exchange’s chances in this lawsuit don’t look good. Additionally, considering it’s only a civil case, clemency from the upcoming President Trump seems extremely unlikely.
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