Supreme Court Dismissal: Binance Faces U.S. Securities Lawsuit

The U.S. Supreme Court declined to hear Binance's appeal against a lawsuit accusing the cryptocurrency exchange of selling unregistered tokens, violating U.S. securities laws. Investors argue that token purchases occurred in the U.S. The 2nd Circuit Court allowed the lawsuit to proceed, despite Binance not being a U.S. entity.

The U.S. Supreme Court rejected an appeal by Binance and its founder, Changpeng Zhao, which aimed to dismiss a lawsuit accusing the cryptocurrency exchange of selling unregistered tokens that plummeted in value. This legal setback stems from arguments that the transactions violated domestic securities laws despite Binance's international operations.

The class action lawsuit was initially permitted by the 2nd U.S. Circuit Court of Appeals in Manhattan, highlighting that Binance's token sales to U.S. investors involved domestic servers, rendering U.S. laws applicable. Investors allege that Binance failed to caution buyers about the high risks associated with certain digital tokens.

Binance contended that the 2nd Circuit misinterpreted previous legal standards in its attempt to extend U.S. securities laws beyond territorial borders, and sought clarification from the Supreme Court on the application of these laws to international trading platforms like Binance.com. This case is separate from Binance's prior violations of federal anti-money laundering regulations.

(With inputs from agencies.)