In a landmark decision affecting the world’s largest cryptocurrency exchange, the US Supreme Court has rejected Binance’s jurisdictional defense, allowing a significant class action lawsuit to proceed against the company.
Binance’s Legal Defense Crumbles
The Supreme Court dismissed Binance’s core argument that US securities laws shouldn’t apply to its operations since the company operates outside American borders. This ruling directly challenges Binance’s long-standing position on US jurisdiction.
Scope of the Class Action
The lawsuit represents investors who purchased specific tokens including EOS, TRX, and OMG on Binance after 2017. These investors accuse the exchange of illegally selling unregistered tokens and failing to disclose investment risks associated with certain low-cap cryptocurrencies.
CZ’s Continued Involvement
Former Binance CEO Changpeng “CZ” Zhao, despite no longer holding an official position, had strongly backed the Supreme Court appeal. His detention on related charges last year adds significant context to Binance’s mounting legal challenges.
Broader Legal Implications
Binance’s official statement acknowledged the changing landscape: “Technological advancements have allowed investors greater access to global financial markets, increasing the size of these markets and the number of Americans involved.” This admission may impact other ongoing legal battles the exchange faces with US federal regulators.
Future Outlook
The ruling potentially weakens Binance’s position in other disputes, demonstrating US courts can hold foreign crypto exchanges accountable. Legal experts note that any hopes for clemency under the next administration, including President Trump, appear slim since this involves civil rather than criminal matters.
Market Impact
As Binance navigates this legal setback, the case parallels a recent Supreme Court decision allowing a shareholder lawsuit against Nvidia. This pattern suggests increased judicial scrutiny of complex financial and technological cases involving major market players.