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Binance faces a class action lawsuit following the Supreme Court’s rejection

The US Supreme Court rejected Binance’s request to appeal a judgment stating that US securities rules apply to cryptocurrency exchanges. This ruling allows a class action lawsuit alleging the illegal sale of unregistered tokens to proceed, adding to Binance’s growing legal issues around the world.

Binance, the world’s largest cryptocurrency exchange, will face a class action lawsuit after the United States Supreme Court declined to hear the company’s and its founder’s appeal. Investors argue that Binance sold unregistered tokens, resulting in large financial losses.

On January 13, the Supreme Court denied Binance’s request to reconsider a lower court ruling that held that US securities laws applied to the exchange. This conclusion was based on the fact that transactions took place on U.S. servers and purchases were completed within the country, despite the fact that Binance does not have a physical headquarters in the United States.

Investor Chase Williams filed the class action in April 2020, alleging that Binance functioned as an unregistered securities exchange or broker-dealer. In its appeal, Binance argued that technological advancements enable Americans to trade easily on foreign platforms, thereby challenging the jurisdiction of US securities laws. However, the court’s denial means that the case can now move forward.

Binance’s legal difficulties have worsened since mid-2023. The Securities and Exchange Commission (SEC) previously sued the exchange and its then-CEO for selling unregistered securities and other illegal services to US consumers. Binance reached a $4.3 billion settlement with the US Department of Justice in November 2023 for money laundering and terrorism financing breaches.

Furthermore, the corporation finds itself embroiled in numerous international legal disputes. In April 2023, Binance faced a class action lawsuit in Canada for alleged securities violations, following its departure from the Canadian market. Furthermore, the FTX bankruptcy estate has sued Binance for $1.8 billion over a disputed 2021 share transaction.

In August 2024, a lawsuit accuses Binance and Zhao of laundering stolen cryptocurrencies. Zhao also received a four-month prison sentence in 2024 for allowing money laundering on the site and failing to implement sufficient anti-money laundering safeguards.

These ongoing legal challenges show Binance’s increasing regulatory scrutiny abroad, raising doubts about its future operations. As the class action case progresses, the exchange faces an increasingly difficult legal landscape.

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