The U.S. Supreme Court has denied Binance’s appeal to dismiss a class action lawsuit alleging the crypto exchange sold unregistered tokens and failed to disclose associated risks. Filed by former investors, the lawsuit accuses Binance of violating U.S. securities laws by offering tokens such as EOS, TRX, and OMG, expanding its scope to cover eligible investors since 2017.
Binance argued the lawsuit lacked jurisdiction, citing its offshore operations. However, the Supreme Court ruled that advancements in technology have enabled greater participation by American investors in global markets, justifying U.S. oversight. In its decision, the court emphasized the increasing influence of U.S. investors in foreign financial markets, rejecting Binance’s defense as insufficient.
The ruling is significant as it underscores the ability of U.S. courts to hold international crypto exchanges accountable for activities that impact American investors. Legal experts believe this decision could weaken Binance’s defense in ongoing cases with U.S. regulators and lawsuits alleging misconduct.
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Binance founder and former CEO Changpeng “CZ” Zhao, who stepped down amid regulatory challenges, remains tied to the case. His previous support for the appeal highlights the importance of the lawsuit for the company’s legal strategy. Zhao’s involvement in related criminal charges adds further complexity to Binance’s mounting legal troubles.
This case comes amid heightened scrutiny of Binance by U.S. federal regulators. Observers suggest the lawsuit could set a precedent for future actions against international crypto exchanges operating in the U.S. market.
As Binance faces increasing legal pressures and reputational challenges, this ruling reinforces the growing regulatory focus on accountability in the rapidly evolving cryptocurrency industry. The lawsuit’s progression signals a tougher stance on ensuring investor protection and enforcing compliance with U.S. securities laws.
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