A United States appeals court has revived a class-action lawsuit against Binance US, reigniting legal challenges for one of the world’s largest cryptocurrency exchanges. The lawsuit, initially dismissed, centers on allegations of price manipulation involving the HEX cryptocurrency token.
Appeals Court Ruling
The United States Ninth Circuit Court of Appeals recently overturned the dismissal of this lawsuit. The case, originally filed by Ryan Cox in 2021, accuses Binance US and CoinMarketCap, a Binance-owned platform, of artificially manipulating the HEX token's price by restricting its ranking on the cryptocurrency price-tracking website. Cox claims this led to lower trading prices for HEX compared to other cryptocurrencies listed by Binance.
The district court had previously dismissed the case, arguing that Cox failed to establish a connection between Binance US’s actions and the state of Arizona. However, the appeals court disagreed, stating that the connections between Binance US, CoinMarketCap, and the broader United States were sufficient to satisfy due process requirements for personal jurisdiction. This decision means the lawsuit will now proceed in the courts.
Wider Implications
This ruling comes at a time of heightened scrutiny for HEX and its founder, Richard Heart. On July 31, 2023, the SEC filed a separate lawsuit against Heart, accusing him of violating federal securities laws and misusing investor funds for personal luxury purchases. The ongoing legal battles around Binance and HEX could have significant implications for the broader cryptocurrency industry, especially regarding how U.S. courts handle cases of alleged price manipulation and jurisdiction over digital asset exchanges.
Binance’s Partial Legal Victory
In a separate legal matter, Binance achieved a partial victory in its ongoing dispute with the U.S. Securities and Exchange Commission (SEC). A federal court recently dismissed several major claims made by the SEC, including the classification of certain crypto tokens as securities. The court ruled that sales of Binance Coin (BNB) on secondary exchanges were not adequately alleged to be securities, and Binance’s stablecoin, BUSD, was also not classified as a security. Binance has hailed this decision as a positive development for the cryptocurrency industry.
Conclusion
The revival of this lawsuit against Binance US adds another layer of complexity to the legal challenges facing the cryptocurrency industry. The outcomes of these cases could set important precedents for future legal actions involving digital asset exchanges and price manipulation allegations.
Edmund
Huang Bo
Bitcoinist
Beincrypto
cryptopotato
Coindesk
Cointelegraph