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The Supreme Court has denied a petition to review a lower court decision that securities laws applied to Binance.
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The US Supreme Court has declined to hear an appeal from crypto exchange Binance and its founder, Changpeng “CZ” Zhao, regarding a class-action lawsuit by investors who alleged the exchange illegally sold unregistered tokens that lost significant value.
On Jan. 13, the Supreme Court of the United States denied a petition to review a lower court ruling that US securities laws applied to the crypto exchange, even though it doesn’t have a physical headquarters in America.
In March, a lower court ruled the case could proceed because token purchases were finalized in the US and transactions took place on US servers, despite Binance not being an American company.
Binance appealed this decision in December, requesting that the higher court review the lower court’s decision and arguing that “recent innovations in technology have empowered investors to participate in foreign financial markets with greater ease and efficiency” and that this interconnectivity enables Americans to trade on foreign exchanges.
Supreme Court denies petition from Binance. Source: Supreme Court
Chase Williams filed the class action in April 2020 on behalf of investors, alleging that Binance sold securities as an unregistered securities exchange or broker-dealer. This case will now be able to proceed following the Jan. 13 Supreme Court decision.
Binance and Zhao’s legal entanglements in the US have escalated since mid-2023 when the Securities and Exchange Commission sued the company and then CEO for selling unregistered securities and illegally servicing US citizens.
In November 2023, Binance reached a $4.3 billion settlement with the US Department of Justice for violating money laundering and terrorism financing laws.
Related: Binance founder CZ sees positive shift in crypto regulation worldwide
Binance was also slapped with a class action in Canada in April for allegedly violating securities laws after it announced its departure from the country in May 2023
The FTX bankruptcy estate is also suing Binance and Zhao for $1.8 billion over an alleged “fraudulent” share deal from 2021.
Meanwhile, CZ and Binance were hit with a separate lawsuit for allegedly laundering stolen crypto in August 2024.
Zhao was sentenced to four months in prison in April after pleading guilty to enabling money laundering at the exchange and failing to implement proper Anti-Money Laundering controls. He was released in late September.
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This article first appeared at Cointelegraph.com News
