Judge Dismisses Lawsuit Against Binance for Allegedly Selling Unregistered Crypto Securities
A lawsuit filed against Binance that accused the exchange of selling non-registered crypto securities was dismissed.
The plaintiffs named nine cryptocurrencies in the suit.
Lawsuit Against Binance Dismissed
- U.S. District Judge Andrew Carter has dismissed the case against the cryptocurrency trader Binance Thursday.
- Motion to Dismiss was made by Binance and the CEO Changpeng Zhao (CZ). The lawsuit (case number. 20-02803) was filed in April 2020 at the U.S. district court in the Southern District of New York.
- Binance faces accusations of breaking U.S. securities laws by selling cryptocurrency that is allegedly not securities that have been registered. It was also accused of not being able to declare itself a broker-dealer or a securities exchange with U.S. regulators.
- The case concerns nine cryptocurrencies that include EOS QSP, KNC, TRX, FUN, ICX, OMG, LEND, and ELFwhich plaintiffs bought via Binance’s online marketplace in 2017. But the coins quickly diminished in value.
- The plaintiffs claimed the Binance “wrongfully engaged in millions of transactions” and did not warn customers regarding investing in the cryptocurrency’s ” significant risks. ” They wanted to recover what they had paid.
- However, Judge Carter determined that the plaintiffs had filed a lawsuit against Binance too late for the lawsuit, noting that more than one year took place between the time they purchased their items and when they filed their lawsuit.
- Additionally, the federal judge stated the U.S. Securities laws didn’t apply since Binance did not operate as a U.S.-based trading platform, even though it was using Amazon computers in the U.S. The judge wrote:
- It wasn’t just the one cryptocurrency platform to be sued over alleged non-registered cryptocurrency security sales. In March, three Coinbase users filed a class-action action for the Nasdaq-listed exchange, alleging that the platform offered 79 securities that were not registered.
- The U.S. Securities and Exchange Commission (SEC) has not yet made a public declaration on which cryptocurrencies are securities. Yet, SEC Chairman Gary Gensler has stated that a lot of the cryptocurrencies listed on exchanges with between 50 and 100 listings are most likely securities.
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