Class Action Lawsuit Filed Against Binance to Proceed

The US Supreme Court has ruled that a class-action lawsuit against Binance will move forward.

Filed by former investors, the suit alleges the exchange illegally sold unregistered tokens.

Binance sought to dismiss the case, arguing that US courts lacked jurisdiction, but the Supreme Court rejected this defense, allowing the legal battle to continue.

Binance Fighting Legal Battles

Binance, one of the world's largest crypto exchanges, faces multiple legal challenges, including allegations in the UK of unlawfully terminating an employee who blew the whistle on misconduct.

However, the current class-action lawsuit at the center of attention originates in the US, where consumers accuse Binance of failing to disclose the significant risks associated with certain low-cap tokens.

Binance has dismissed these claims as baseless, arguing that US securities laws do not apply since the exchange is not based in the country.

The US Supreme Court, however, has ruled otherwise.

Binance claimed in its petition:

“Recent innovations in technology have empowered investors to participate in foreign financial markets with greater ease and efficiency. This interconnectivity and ease of access has increased not only the size of the market for trades but also the number of Americans who trade on foreign exchanges.”

Former Binance CEO Changpeng Zhao (CZ) was a key advocate for this appeal, despite no longer representing the company.

Nevertheless, he remains tied to the proceedings, having been jailed on related charges nearly a year ago.

The ruling could have far-reaching implications for Binance, as US regulators have already pursued the exchange on multiple criminal charges.

This case, however, is a civil matter, and former users who purchased ELF, EOS, FUN, ICX, OMG, QSP, or TRX after 2017 are eligible to join the lawsuit.

While US federal policy on crypto has shifted, the judiciary remains independent.

Notably, last month, the Supreme Court allowed a shareholder lawsuit against Nvidia to move forward in a case with striking similarities to Binance's.

With this decision, the exchange's legal prospects appear increasingly uncertain.

And given that this is a civil case, potential clemency from a future Trump administration seems highly improbable.