A United States appeals court has partially reversed the dismissal of a proposed class-action lawsuit against Binance.US, which alleges that the exchange unlawfully manipulated the price of the Hex token.
The decision from the U.S. Court of Appeals for the Ninth Circuit revives the claims made by plaintiff Ryan Cox against Binance.US and CoinMarketCap.
In the original lawsuit filed in 2021, Cox accused Binance Capital Management and Binance.US of artificially suppressing HEX’s ranking on CoinMarketCap, a cryptocurrency price-tracking platform owned by Binance. Cox claimed that this manipulation led to a lower trading price for HEX, while Binance’s own cryptocurrencies were ranked more favorably.
The case was initially dismissed by a district court in February 2023 on the grounds that Cox failed to provide sufficient connections between Binance.US and Arizona, where the lawsuit was first filed. The district court concluded that it lacked jurisdiction over the case, adding that it did not have the authority to adjudicate the matter.
However, the appeals court disagreed with this conclusion. The panel of three judges ruled that the district court does have jurisdiction over the U.S.-based defendants since they have sufficient contacts with the United States as a whole. The court noted that because each company is incorporated or has a principal place of business in the U.S., they meet the requirements for due process.
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The appeals court also found that Cox’s claims of price manipulation against Binance.US were justifiable and ordered that these claims be remanded for further legal proceedings.
This case adds to the ongoing legal challenges facing Binance, including a lawsuit filed by the SEC against HEX’s creator, Richard Heart, for allegedly violating federal securities laws and defrauding investors. The SEC claims that Heart used investor funds for personal luxury purchases rather than for developing or marketing the HEX token.
Binance.US has recently appointed Martin Grant, a former chief compliance and ethics officer at the Federal Reserve Bank of New York, following the resignation of founder Changpeng Zhao from his role as chair.
The exchange is currently engaged in a legal battle with the SEC, which escalated last year with allegations similar to those faced by other platforms such as Coinbase and Kraken. Binance.US CEO Norman Reed, formerly the exchange’s general counsel, remains optimistic about the outcome, criticizing the SEC for not providing clear guidance on which digital assets are considered securities.
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Publish date : 2024-08-13 00:17:00
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