U.S. Supreme Court Denies Binance’s Appeal, Upholding Class Action Lawsuit Over Unregistered Securities

The U.S. Supreme Court has dealt a significant legal blow to Binance and its former CEO, Changpeng ‘CZ’ Zhao, by denying their appeal to dismiss a class action lawsuit. The lawsuit, filed by crypto investors, accuses the company of selling unregistered securities, including tokens like Tron (TRX) and EOS (EOS), without proper risk disclosure.

Lawsuit Details and Allegations

The investors claim that Binance failed to adequately disclose the risks associated with these tokens, seeking to recover funds invested in them. Binance’s legal team refuted these allegations, arguing that the company’s operations fall outside the scope of U.S. securities laws. Initially, Binance sought to have the case thrown out by the U.S. Court of Appeals for the Second Circuit.

Court’s Ruling and Implications for Binance

However, the Appeals Court ruled against Binance, asserting that the company could be held liable for transactions involving tokens purchased within the U.S. This decision was upheld by the U.S. Supreme Court, further complicating the legal situation for the crypto exchange. The ruling comes at a time when Binance is already facing several high-profile legal challenges.

Additional Legal Troubles for Binance and CZ

This latest case adds to the growing list of legal troubles for Binance. In November 2023, the company reached a $4.3 billion settlement with the Department of Justice over violations of federal anti-money laundering regulations. As part of the settlement, CZ resigned as CEO and served four months in prison.

The company is also entangled in a separate securities case with the U.S. Securities and Exchange Commission (SEC), highlighting ongoing regulatory scrutiny in the rapidly evolving crypto space.

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