An appeals court has breathed new life into a class action lawsuit against Binance, the world’s largest crypto exchange, overturning a lower court’s decision to dismiss the case. This revival gives a group of investors another opportunity to pursue their legal action against Binance and its former CEO, Changpeng Zhao, along with other executives.<\/p>\n\n\n\n
The lawsuit, initially filed in April 2020, involves a group of crypto investors who claim to have purchased what they allege are securities from Binance, specifically pointing to ERC-20 tokens like EOS, TRX, ELF, FUN, ICX, OMG, and QSP. The plaintiffs argued that their transactions with these tokens should be protected under U.S. federal securities laws, challenging Binance’s operational status and ties within the U.S.<\/p>\n\n\n\n
In a reversal of the Southern District of New York’s May 2022 ruling, the Second Circuit Court of Appeals found that the investors had “plausibly alleged” that their transactions were completed on servers located within the U.S., and that they had accessed Binance’s services from the U.S. This contradicts the earlier dismissal, which was partly based on the timing of the lawsuit and Binance’s argued lack of sufficient presence in the U.S.<\/p>\n\n\n\n
The appeals court also addressed the timing of the lawsuit, suggesting that the statute of limitations should start from when the tokens were purchased, which was within a year before the lawsuit was filed. This point is critical because it refutes the dismissal reason that the lawsuit was filed too late.<\/p>\n\n\n\n
This decision does not take a stance on whether the ERC-20 tokens in question are classified as securities. Instead, it allows for the case to return to the district court, where both parties can present arguments regarding the nature of these tokens under the securities law. Drew Hinkes, a partner at K&L Gates, highlighted the importance of this ruling for clarity on the regulation of digital assets in secondary markets within the U.S.<\/p>\n\n\n\n
Plaintiffs’ attorney Jordan Goldstein expressed satisfaction with the appeals court’s unanimous decision to allow the lawsuit to proceed, emphasizing the intention to continue pursuing the class action against Binance and Changpeng Zhao.<\/p>\n\n\n\n
This ruling marks a significant moment for the cryptocurrency industry, as it could shape future legal interpretations of digital assets and their regulation under U.S. securities laws. The outcome of this revived lawsuit may have far-reaching implications for crypto exchanges and investors alike.<\/p>\n","protected":false},"excerpt":{"rendered":"
An appeals court has breathed new life into a class action lawsuit against Binance, the world’s largest crypto exchange, overturning a lower court’s decision to dismiss the case. This revival gives a group of investors another opportunity to pursue their legal action against Binance and its former CEO, Changpeng Zhao, along with other executives. Background […]<\/p>\n","protected":false},"author":5,"featured_media":3676,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[257,30,40],"tags":[],"class_list":{"0":"post-3674","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-bitcoin","8":"category-exchange","9":"category-regulation"},"acf":[],"yoast_head":"\n