A federal appeals court has reinstated its lawsuit against cryptocurrency exchange Binance.
Reuters reported on March 8 that the lawsuit, in which investors accused Binance of violating US securities laws by selling unregistered tokens, had been renewed. According to the document, investors claim that the exchange sold tokens that lost most of their value.
The appeals court also said investors could file claims related to purchases made in the year before the lawsuit was filed. Seven tokens — aelf (ELF), EOS (EOS), FUNToken (FUN), Icon (ICX), OMG Network (OMG), Quantstamp (QSP), and Tron (TRX) — that investors bought through Binance starting in 2017 , quickly lost most of its value.
“They claimed that Binance failed to warn them about the ‘significant risks’ of cryptocurrencies and sought a refund.”
Reuters report
However, representatives of the cryptocurrency exchange claim that US securities laws do not apply because the exchange is located outside the country.
The latest investor lawsuit is not the first time Binance has faced trouble in the country. At the end of February, the court approved Binance's plea deal for violating anti-money laundering laws, under which it must pay $4.3 billion. District Judge Richard Jones noted that the cryptocurrency exchange was subject to US laws, but he made a “deliberate decision” not to follow them.
The deal was approved after Binance was accused of serving clients in sanctioned countries, as well as terrorist organizations and drug traffickers, in violation of US laws. The founder and CEO of Binance, Changpeng Zhao, pleaded guilty to the company and himself.
Richard Teng, who was previously responsible for all regional markets outside the US, has become the new head of the cryptocurrency exchange.
