US Court of Appeals Resurrects Investor Case Against Binance
In a landmark decision, the 2nd U.S. Circuit Court of Appeals in Manhattan revived the case against the world’s largest cryptocurrency exchange. binance. The case, which was initially dismissed in March 2022, was reinstated, opening an important chapter in the intersection of cryptocurrency and U.S. securities laws.
Decision Reasons and Consequences
In a unanimous 3-0 decision, the appeals court ruled in favor of the class-action investors that U.S. securities laws apply to their cases. The problem was that token purchases that took place in the United States could not be reversed; transactions was subject to internal rules.
Circuit Judge Alison Nathan noted that Binance’s use of US-based Amazon servers is central to its operation. This fact highlighted the exchange’s direct connection to the US territory and called into question Binance’s claim that it remains outside any country’s securities regulations because it operates all over the world.
Legal Precedents and Binance’s Position
This case raises again some critical issues regarding the jurisdiction and territorial reach of U.S. securities laws, particularly in global digital transactions. Binance used this Morrison v National Australia Bank Since 2010, it has argued that it should be exempt from U.S. securities laws because its operations are conducted outside the United States. However, the latest decision contradicts this assumption and may be a forerunner of the way US law regulates international crypto exchanges.
Binance’s response to the reopened lawsuit is unknown, as representatives have not yet commented on the decision. The legal stance of the crypto exchange is being followed closely, especially after the recent legal problems. criminal complaint It leads to heavy fines for violations of anti-money laundering and sanctions laws.
Impact on Investors and the Crypto Industry
Investors who lost money from their token purchases with Binance, specifically the seven cryptocurrencies mentioned in the case (ELF, EOS, FUN, ICX, OMG, QSP and TRX), now have another chance to demand compensation. Allegations that Binance did not properly disclose the risks associated with these tokens to investors constitute one of the central elements of the case.
The broad implications for the cryptocurrency industry are huge. This decision could impact the practices of crypto exchanges in the US and the way they disclose the risks of token investments to their customers. It could also lead to greater regulatory scrutiny and force exchanges to comply with U.S. securities laws wherever they primarily operate.
Also read: Coinbase Records Another Outage As Bitcoin Price Reaches ATH
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Kelvin is a distinguished author specializing in crypto and finance, with a bachelor’s degree in Actuarial Science. Known for her sharp analysis and insightful content, she is fluent in English and specializes in comprehensive research and on-time delivery.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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