Judge Dismisses Lawsuit Against Binance for Allegedly Selling Unregistered Crypto Securities – According to a case filed against the cryptocurrency exchange, Binance was found not guilty of promoting unregistered crypto securities. The plaintiffs cited nine cryptocurrencies in their claim.
The request for dismissal was submitted by Binance and its CEO Changpeng Zhao (CZ). The complaint (case no. 20-02803) is filed in the US District Court for the Southern District of New York in April 2020.
Binance has been accused of violating US securities laws by selling cryptocurrencies which are allegedly unregistered securities. The exchange is also accused of failing to register as a securities exchange or broker-dealer with US regulators.
Starting January 2017, the plaintiffs acquired nine cryptocurrencies on Binance’s online exchange: EOS, QSP, TRX, FUN, OMG, ICX, KNC, LEND, and ELF.
The Coins, on the other hand, quickly depreciated in value. According to the plaintiffs, Binance “wrongfully engaged in millions of transactions” and failed to warn them about the major risks of investing in cryptocurrencies. They were hoping to recoup the money they had spent.
Judge Carter, on the other hand, ruled that the plaintiffs filed their lawsuit too late, citing the fact that it had been more than a year before their purchases and the filing of the action.
Furthermore, despite the fact that Binance used Amazon computer servers in the United States, the federal judge ruled that because Binance was not a US-based exchange, US securities laws did not apply.
Binance was not the only cryptocurrency exchange facing legal action over the sale of unregistered digital assets. In March, three Coinbase customers filed a class-action lawsuit alleging that the Nasdaq-listed cryptocurrency exchange issued 79 unregistered securities.
The US Securities and Exchange Commission (SEC) has not stated specifically which cryptocurrencies constitute securities. According to SEC Chairman Gary Gensler, many of the cryptocurrencies traded on exchanges with 50 to 100 listings are possibly securities.