Court Revives Binance 2022 Lawsuit for Selling Unregistered Securities
According to recent reports, a federal appeals court has overturned the dismissal of a legal case accusing Binance of breaching US securities laws through the sale of unregistered tokens.
Back in March 2022, District Judge Andrew Carter dismissed a class action lawsuit initiated by cryptocurrency investors who had utilized Binance to acquire tokens that later experienced significant price drops.
These investors began acquiring the tokens through Binance in 2017, which included assets like aelf (ELF), EOS (EOS), FUNToken (FUN), ICON (ICX), OMG Network (OMG), Quantstamp (QSP), LEND, Kyber Network Crystal (KNC), and Tron (TRX). Their aim was to recover their investments, arguing that Binance, the world’s largest crypto exchange, neglected to caution them about the substantial risks associated with purchasing these digital assets.
However, Judge Carter ruled in favor of Binance, asserting that US securities laws did not apply since Binance is not a domestic exchange. Additionally, he noted that the investors had not acted promptly, waiting about a year after their purchases to file the lawsuit.
Now, Reuters reveals that the 2nd US Circuit Court of Appeals in Manhattan has revived the lawsuit.
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In a unanimous decision, the appellate court determined that US securities laws were indeed relevant in this instance because the token purchases became final in the US following payment. The court also highlighted that Binance relies on Amazon’s domestic servers to host its platform.
Circuit Judge Alison Nathan remarked that Binance is “notoriously denies the applicability of any other country’s securities regulation regime.”
Moreover, the appellate court specified that investors could still pursue the recovery of their investments if they had invested within a year prior to filing the lawsuit.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
