Supreme Court Denies Binance’s Bid to Avoid Class Action Lawsuit
The US Supreme Court has denied Binance and its former CEO Changpeng Zhao's request to dismiss a class action lawsuit from investors. The lawsuit alleges the exchange illegally sold unregistered tokens, including ELF, EOS, FUN, ICX, OMG, QSP, and TRX, without warning about associated risks.
Jurisdiction Debate Over US Securities Laws
Binance argued that US securities laws shouldn't apply to it due to its operations outside the US. However, the 2nd US Circuit Court of Appeals ruled that these laws could apply since purchases were finalized in the US. Binance claimed the court misapplied a previous Supreme Court ruling regarding jurisdiction.
Additional Legal Challenges for Binance
This case is separate from Binance's November 2023 guilty plea and $4.3 billion fine for violating US anti-money laundering laws. Zhao received a four-month prison sentence related to these violations.
Additionally, Binance and Zhao face a lawsuit from the collapsed FTX exchange over an alleged $1.8 billion improper transfer. Regulatory issues have led several countries, including Canada, Japan, and Germany, to restrict Binance's operations.