Cryptocurrency NewsAppeals Court Revives Lawsuit Against Binance for Alleged Securities Law Violations

Appeals Court Revives Lawsuit Against Binance for Alleged Securities Law Violations

A United States federal appellate court has reactivated a lawsuit directed at the cryptocurrency exchange Binance, as reported by Reuters on March 8. This litigation, initiated by investors, alleges that Binance circumvented U.S. securities regulations by offering unregistered tokens, which subsequently depreciated significantly in value.

The appellate court has permitted investors to advance claims for purchases made up to a year prior to the lawsuit’s filing. The dispute involves seven specific tokens — aelf (ELF), EOS (EOS), FUNToken (FUN), Icon (ICX), OMG Network (OMG), Quantstamp (QSP), and Tron (TRX) — all of which were acquired through Binance starting in 2017 and experienced a dramatic loss in value shortly thereafter.

Investors have accused Binance of not disclosing the “significant risks” associated with these tokens, aiming to recover their initial investments.

Despite these allegations, Binance contends that U.S. securities legislation is inapplicable to them as their operations are based outside of the United States.

This recent lawsuit is among several legal challenges Binance has faced in the U.S. In a separate case, a federal court ratified Binance’s settlement agreement related to breaches of anti-money laundering statutes, imposing a fine of $4.3 billion. District Judge Richard Jones acknowledged Binance’s obligation to adhere to U.S. regulations, highlighting the company’s intentional non-compliance.

This settlement followed accusations against Binance for providing services to clients in sanctioned countries, alongside alleged connections to terrorist groups and narcotics traffickers, in contravention of U.S. law. Changpeng Zhao, Binance’s founder and CEO, has acknowledged both his and the company’s culpability.

In the wake of these events, Richard Teng, formerly in charge of Binance’s operations outside the United States, has been appointed as the new leader of the cryptocurrency exchange.

source

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