U.S. Appeals Court Reverses Dismissal of Investor Lawsuit Against Binance
Summary:
A U.S. appeals court has reversed a previous decision that dismissed a class-action lawsuit against cryptocurrency exchange Binance, filed by investors contending they were deceived into buying crypto tokens believed to be registered securities. The lawsuit accuses Binance of illegally selling securities without proper registration, with investors seeking to void their contracts with the company. This development comes amid ongoing legal challenges faced by Binance from U.S. securities regulators.
An appellate court in the United States has repealed a previous verdict that tossed out a class-action lawsuit brought by investors against Binance, a cryptocurrency exchange. The plaintiffs allege they were misled into believing they were purchasing cryptocurrency tokens classified as securities. An announcement was made stating the judgment with investors alleging transparency issues in Binance's securities sale, which was formerly dismissed by a district court, has now been reversed in favor of the plaintiffs, on March 8.
The court document stipulates that every reason given by the district court to strike down the plaintiffs' claims was flawed. The lawsuit was initiated by Chase Williams in April 2020, on the grounds that Binance supposedly pledged to vend securities without registering as a broker-dealer or securities exchange. The investors are further seeking to void the contracts they signed with Binance.
The plaintiffs want to be compensated for Binance's purported contravention of Section 12(a)(1) of the Securities Act of 1933, 15 U.S.C., claiming that this transgression transpired when Binance illicitly publicized and sold billions of dollars of crypto assets termed 'tokens,' unregistered as securities.
The district court previously rejected the suit, categorizing the plaintiffs' claims as overdue as per the relevant time constraints. However, the appellate court has sided with the plaintiffs' assertion that Binance falls under domestic security laws and their initial submission was within the permissible time frame.
This development follows the ongoing series of legal battles that Binance is currently confronted with by the U.S. securities regulatory body. Cointelegraph reported on March 6 that the U.S. Securities and Exchange Commission (SEC) has been unable or disinclined to respond to queries regarding customer asset custody.
In June 2023, the SEC filed a lawsuit against Binance, Binance.US, its founder, and ex-CEO Changpeng "CZ" Zhao, accusing them of vending unregistered securities and merging customer assets in a separate firm that Zhao managed. In November 2023, Binance managed to settle this matter with the U.S. Department of Justice for a sum of $4.3 billion by confessing to infringements of U.S. anti-money laundering and terrorism financing laws. In line with the settlement, Zhao accepted the charges of money laundering and is scheduled to appear for his criminal sentencing hearing come April.
Published At
3/10/2024 4:30:03 AM
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