- Appeals court overturns dismissal of lawsuit alleging Binance sold securities without proper registration.
- Investors argue Binance violated the Securities Act by offering unregistered tokens.
- The case adds to Binance’s legal woes, including ongoing SEC investigations and settlements.
A U.S. appeals court has breathed new life into a lawsuit brought by investors against the major exchange, Binance. The court’s decision overturns a previous ruling that had dismissed the lawsuit, which centers on allegations that Binance sold securities without the necessary regulatory registrations.
A Turning Point for Investor Claims
The lawsuit, initiated by investor Chase Williams in April 2020, accuses Binance of bypassing U.S. securities laws by offering and promoting crypto-assets, known as “tokens,” without registering them as securities. This legal battle seeks not only to challenge Binance’s practices but also to annul the contracts investors entered with the exchange under these terms.
Implications for Binance and the Broader Crypto Sector
This legal victory for the plaintiffs comes at a time when Binance is already facing considerable scrutiny from U.S. regulators, including a comprehensive lawsuit from the SEC and a significant settlement with the Department of Justice over violations of money laundering and terrorism financing laws. The appeals court’s decision underscores the ongoing tension between crypto entities and regulatory bodies, highlighting the crucial need for compliance within the rapidly evolving digital asset landscape.
