A federal judge dismissed a class action lawsuit alleging Binance violated US securities laws and sold altcoin projects that were not registered with the US Securities and Exchange Commission (SEC). Here are the details…
Binance users sued for these 12 altcoins
The original complaint filed with the US District Court for the Southern District of New York, around 2017 and 2018 ELF, CVC, EOS, BNT, SNT, QSP, It was made by a group of investors who said they invested in KNC, TRX, FUN, ICX, OMG, LEND tokens. Subsequently, BNT, SMT and CVC were removed from the complaint and the case dealt with the remaining 9 altcoins. Investors said the tokens have lost most of their value since they were purchased and are seeking compensation for the price paid for the tokens and fees paid to Binance in connection with their purchase. The following statements were used in the complaint:
Binance […] unfairly processed millions of transactions without registering with the SEC as an exchange or broker-dealer. As a result, investors were not informed of the significant risks inherent in these investments, as required by federal and state securities laws.
claimed that they purchased it with the expectation of a reasonable profit”. Judge Andrew L. Carter said in his ruling on Thursday (March 31) that investors filed a lawsuit too late as they waited more than a year after purchasing the tokens to file a complaint. Most of the tokens were purchased in 2018 and the original filing was not made until April 2020.
Judge pointed out that Binance is not based in the US
Investors started that timeline for filing complaints as the SEC issued a regulatory framework in April 2020 alleging that digital tokens are securities However, Carter found that the relevant laws apply only when alleged violations are detected, not when they occur. Judge Carter also said that local securities laws do not apply to Binance, as there is no local exchange in the US, which is headquartered in the Cayman Islands.
This is not the only class action lawsuit filed against a crypto exchange on such grounds. As we have also reported as Kriptokoin.com, a lawsuit was filed against Coinbase on March 11 in the same court for allegedly operating as an unregistered securities exchange.
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