Binance lawsuit gets green light from US court
A Supreme Court rejection allows allegations of unregistered token sales to proceed
The United States Supreme Court has decided not to review a legal case against Binance, one of the largest platforms for buying and selling cryptocurrencies. This decision allows a lawsuit to move forward, accusing Binance of selling digital tokens that were not registered properly and lost value.
On Monday, the court rejected the appeal from Binance and its founder, Changpeng “CZ” Zhao. The decision supports an earlier ruling that US laws apply to the platform, even though Binance doesn’t have an office in the US.
The case began in March 2020, when Chase Williams filed a lawsuit on behalf of a group of investors. The investors claim that Binance operated without following US financial rules. The lawsuit focuses on the fact that many transactions happened in the US using servers based there. Because of this, the earlier court decided that US laws apply.
In December, Binance asked the Supreme Court to overturn this ruling. The platform argued that today’s technology makes it easy for people to trade on international websites, so US laws shouldn’t apply. With the Supreme Court’s decision not to review the case, the lawsuit will now continue.
What Is Binance?
Binance is a popular platform for trading cryptocurrencies, which are digital forms of money like Bitcoin and Ethereum. People use Binance to buy, sell, and exchange these digital currencies. CZ is the founder and a well-known figure in the cryptocurrency world.
Legal challenges continue
This lawsuit is one of several legal problems Binance and CZ are facing. Since 2023, US authorities have taken a closer look at the platform. The US Securities and Exchange Commission (SEC), which oversees financial markets, has accused Binance of selling digital tokens without following the rules and offering services to U.S. customers without permission.
In November 2023, Binance agreed to pay $4.3 billion to settle charges from the US Department of Justice. These charges involved not preventing money laundering and activities related to financing terrorism. Another case involves the FTX bankruptcy estate, which is seeking $1.8 billion from Binance and CZ over claims of fraud in a 2021 deal.
Global implications
Binance’s legal troubles extend beyond the United States. In Canada, the company faces another lawsuit for allegedly breaking financial rules after it announced its exit from the country in May 2023. Furthermore, in 2024, CZ was sentenced to four months in prison after admitting to charges linked to money laundering. He was released later that year.
Despite these challenges, Binance remains one of the most widely used platforms for trading cryptocurrencies. However, the increasing number of legal cases shows that governments worldwide are taking a closer look at how cryptocurrency companies operate.
