United

April

Optimism

A recent decision by a United States appeals court has revived a class-action lawsuit by investors against the cryptocurrency exchange Binance, challenging a previous dismissal by a lower court. 
The United States Court of Appeals for the Second Circuit, on March 8, ruled in favor of the investors, overturning the district court’s dismissal of claims related to transparency issues in Binance’s sale of what are alleged to be securities. 
The appeals court found the district court’s reasons for dismissal flawed, stating, “We hold that each of the district court’s bases for dismissing Plaintiffs’ claims that are before us on appeal was erroneous.” 
The lawsuit, initiated in April 2020 by Chase Williams on behalf of similarly situated investors, accused Binance of engaging in the sale of securities without proper registration as a securities exchange or broker-dealer. 
The plaintiffs are seeking to nullify contracts with Binance and demand damages for what they claim is a violation of Section 12(a)(1) of the Securities Act of 1933. 
This violation pertains to Binance’s promotion, offer, and sale of crypto-assets or “tokens” that were allegedly not registered as securities, with the district court previously ruling the lawsuit as untimely based on statutes of limitations. 
READ MORE: <a href="https://www.cryptointelligence.co.uk/bnb-hits-two-year-high-amid-market-optimism-what-price-target-is-next/" data-wpel-link="internal">BNB Hits Two-Year High Amid Market Optimism – What Price Target is Next?</a> 
However, the appeals court has sided with the plaintiffs, asserting that <a href="https://www.binance.com/en" data-wpel-link="external" target="_blank" rel="nofollow external noreferrer">Binance</a> falls under U.S. securities laws and that the lawsuit was filed within an appropriate timeframe. 
This legal reversal arrives amidst Binance’s ongoing legal battles with U.S. authorities. 
Notably, the U.S. Securities and Exchange Commission (SEC) has faced criticism for its handling of inquiries regarding the custody of customer assets. 
In June 2023, the SEC initiated a lawsuit against Binance, Binance.US, and its founder, Changpeng “CZ” Zhao, for the alleged sale of unregistered securities and commingling of customer assets in a separate entity controlled by Zhao. 
Binance settled with the U.S. Department of Justice in November 2023 for $4.3 billion over charges of money laundering and violating terrorism financing laws. 
Zhao, having pleaded guilty to money laundering charges, is scheduled for sentencing in April. 
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Appeals Court Revives Investor Lawsuit Against Binance, Challenges Previous Dismissal Over Securities Sale

Crypto Intelligence

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