Cryptocurrency exchange Binance finds itself entangled in yet another legal battle as a federal appeals court reinstates a lawsuit filed by investors over crypto losses.
Reuters reported on March 8 that the lawsuit, accusing Binance of selling unregistered tokens in violation of US securities laws, has been revived. Investors allege that tokens sold by the exchange suffered significant losses, sparking legal action.
The appeals court ruling also allows investors to pursue claims related to purchases made up to a year before the lawsuit’s filing. Tokens such as aelf (ELF), EOS (EOS), FUNToken (FUN), Icon (ICX), OMG Network (OMG), Quantstamp (QSP), and Tron (TRX) bought through Binance starting in 2017 reportedly plummeted in value.
Despite Binance’s claims that US securities laws do not apply due to its offshore location, legal challenges persist. Earlier in February, a court approved a plea deal requiring Binance to pay $4.3 billion for violating anti-money laundering laws. District Judge Richard Jones highlighted Binance’s deliberate non-compliance with US laws.
The approval followed allegations that Binance served clients in sanctioned countries, including terrorist organizations and drug traffickers, contravening US laws. Binance’s founder and CEO, Changpeng Zhao, admitted guilt on behalf of the company and himself.
In the wake of these legal issues, Richard Teng, formerly overseeing all markets outside the US, assumes leadership as the new head of the crypto exchange.
