Binance US Legal Woes Intensify As Appeals Court Revives Lawsuit

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As a seasoned analyst with over two decades of experience in financial markets, I’ve witnessed numerous twists and turns in legal battles between regulatory bodies and digital asset exchanges. The recent decision by the United States Ninth Circuit Court of Appeals to partially reinstate the class-action lawsuit against Binance US is no exception.

As a researcher, I’m excited to report that a recent decision by a U.S. appeals court has given fresh momentum to a class-action lawsuit against Binance US, one of the global leaders in cryptocurrency exchanges. This legal action, which accuses Binance US of manipulating the price of the HEX token, was initially dismissed but has now been partially reinstated.

Appeals Court Reinstated Lawsuit Against Binance US

In a recent decision made on August 12, the U.S. Court of Appeals for the Ninth Circuit partially reversed the dismissal of a class-action lawsuit against Binance US. This lawsuit, which accuses Binance US of manipulating the price of the HEX cryptocurrency token, has now been allowed to proceed following the court’s ruling.

In 2021, Ryan Cox brought a lawsuit against the crypto exchange and CoinMarketCap, claiming they illegally manipulated the value of the HEX token. According to Cox, these parties intentionally limited HEX’s ranking on CoinMarketCap, a Binance-owned platform that tracks cryptocurrency prices, causing it to trade at lower prices compared to Binance’s cryptocurrencies.

In a different ruling, a trio of appellate judges disagreed with the initial dismissal by the district court. The district court’s decision had stated that Cox hadn’t provided enough evidence linking actions in Arizona to Binance US. However, the appeals court argued that the district court’s definition of “sufficient minimum contacts” was flawed. They pointed out that both parties have substantial ties with the United States due to their incorporation or primary operations within the nation.

From my perspective as a crypto investor, it was decided that the circumstances align with the necessary standards for personal jurisdiction regarding the case involving Binance.US and accusations of price manipulation by Cox. Consequently, this matter has been sent back to the court system for additional legal proceedings due to the validity of his claims.

Under heightened examination, the decision pertains to the HEX token and its creator, Richard Heart. On July 31, 2023, the Securities and Exchange Commission (SEC) filed a separate lawsuit against Heart, accusing him of breaching federal securities laws and defrauding investors out of at least $12.1 million. The SEC asserts that Heart diverted investor funds for personal extravagant expenditures, such as a 555-carat diamond, high-end timepieces, and luxury vehicles.

Restarting this court case against them introduces an extra level of intricacy to the continuing legal battles within the crypto world. It could also establish new benchmarks for how American courts handle jurisdiction in disputes related to digital exchange platforms and accusations of market manipulation.

Binance Celebrates Partial Victory In SEC Case

In an unrelated legal case, Binance is rejoicing over a notable achievement in its continuous legal battle with the U.S. Securities and Exchange Commission (SEC). A federal court has recently thrown out several key accusations made by the SEC against the exchange, one of which was that cryptocurrency tokens are not considered securities.

Additionally, it was determined that sales of Binance Coin (BNB) on secondary markets were not categorized as securities, and Binance’s stablecoin, BUSD, does not fall under the security classification. Binance celebrated this decision as a triumph for the broader cryptocurrency sector, while Binance US expressed readiness for future stages of this legal process.

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2024-08-13 14:02