The U.S. Supreme Court has refused to hear an appeal from Binance and its CEO, Changpeng “CZ” Zhao, concerning a class-action lawsuit filed by investors. The lawsuit alleges that the crypto exchange illegally sold unregistered tokens, which resulted in significant losses for investors. The decision, made on January 13, upholds a lower court’s ruling that U.S. securities laws apply to Binance, despite its lack of a physical headquarters in the United States.
In March 2023, a lower court ruled that the case could proceed because the token purchases were finalized in the U.S. and the transactions occurred on U.S. servers. Binance, which operates outside the U.S., argued that the case should be dismissed, citing the growing interconnectedness of global markets and the ability of U.S. investors to trade on foreign exchanges. However, the Supreme Court’s refusal to hear the case now allows the lawsuit to continue.
The class-action lawsuit, filed by Chase Williams in April 2020, accuses Binance of operating as an unregistered securities exchange or broker-dealer. The case adds to a series of legal challenges Binance and Zhao have faced in the U.S. since mid-2023. The U.S. Securities and Exchange Commission (SEC) sued Binance for allegedly selling unregistered securities and illegally servicing U.S. citizens. Additionally, in November 2023, Binance reached a $4.3 billion settlement with the U.S. Department of Justice over violations related to money laundering and terrorism financing laws.
Binance’s legal troubles extend beyond the U.S. In April 2023, the exchange was slapped with a class action in Canada for securities violations after announcing its exit from the country. The FTX bankruptcy estate is also suing Binance and Zhao for $1.8 billion over an alleged fraudulent share deal in 2021, while a separate lawsuit in August 2024 accuses them of laundering stolen crypto.
Also Read: Binance Coin (BNB) Teeters on the Edge: Rising Wedge Pattern Signals Bearish Breakdown
These mounting legal battles highlight the growing scrutiny faced by Binance as regulatory authorities worldwide take a closer look at the exchange’s operations.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
