Binance Hit with Class Action Lawsuit After Supreme Court Rejection
The US Supreme Court declined to hear Binance and CZ’s appeal and the class action lawsuit against Binance can move forward.
The lawsuit is about Binance selling unregistered tokens to investors and causing them to lose a lot of money.
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The case is about whether US securities laws apply to Binance, even though Binance doesn’t have a physical office in the US. A lower court ruled in March 2024 that they do apply because Binance’s tokens were traded on US servers and many purchases were completed in the US.
Background of the Class Action Lawsuit
The class action was filed by investor Chase Williams in April 2020. It claims Binance operated as an unregistered securities exchange or broker-dealer by selling unregistered tokens to US investors. Binance appealed in December 2024 and argued that with the advancement of technology, Americans can easily participate in global financial markets, including foreign exchanges like Binance. But the Supreme Court declined to hear the case so the lawsuit can move forward.
Binance has had more legal troubles since 2023 when the US Securities and Exchange Commission (SEC) sued the company and CZ for violating securities laws by serving US residents and selling unregistered securities. This is one of many lawsuits against the exchange.
Ongoing Legal Battles and Global Scrutiny
Binance’s legal troubles go beyond the US. In November 2023, the company settled with the US Department of Justice for $4.3 billion over money laundering and terrorism financing allegations. Binance is also facing multiple lawsuits worldwide, including a class action in Canada in April 2023 for alleged securities violations after the company left the country.
In addition to those, Binance is being sued for $1.8 billion by the FTX bankruptcy estate over a disputed share deal in 2021. Binance and CZ are also being sued for money laundering in a lawsuit filed in August 2024. CZ pleaded guilty to money laundering charges and was sentenced to 4 months in prison in April 2024 but was released in late September.
Key Takeaways
The U.S. Supreme Court has denied Binance’s petition to appeal, allowing a class action lawsuit to proceed.
The lawsuit accuses Binance of selling unregistered securities to U.S. investors.
Binance and Zhao face a series of legal challenges, including a $4.3 billion settlement with the U.S. Department of Justice.
These ongoing legal battles signal an uncertain future for Binance as it navigates mounting regulatory scrutiny and multiple lawsuits in various countries.
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