Binance likely to face another lawsuit for violation of US securities laws
- A US federal appeals court reopened a lawsuit where investors allege that Binance violated US securities laws.
- According to the appeals court, investors could pursue claims on their purchases from the year before the lawsuit.
- The lawsuit mentions ELF, EOS, FUN, ICX, OMG, QSP and TRX, these tokens lost much of their value since 2017.
Binance had won the lawsuit brought against it by investors of seven tokens on the exchange’s platform, back in 2022. A court in Manhattan has revived the lawsuit and Binance is likely to face litigation on the violation of US securities laws.
Also read: BNB price rises 10% despite Binance Exchange’s international regulatory troubles
Binance could face a lawsuit over investors’ crypto losses
Binance recently settled charges against the exchange with the US Department of Justice for a fine of approximately $4.3 billion. The exchange is likely in legal trouble again with investors as the 2nd US Circuit Court of Appeals revives a lawsuit against the exchange platform. Investors of seven tokens - aelf (ELF), EOS, FunToken (FUN), ICON (ICX), OMG Network (OMG), QSP, and TRON (TRX), have filed a lawsuit against the exchange, accusing it of securities laws violation.
Binance faces new lawsuit. Source: CourtListener
Most of these tokens have lost much of their value since 2017. The appeals court says that investors can claim damages from purchases made within the year before they filed the lawsuit against Binance. The decision was made by Manhattan court on Friday, reversing a March 2022 ruling by US District Judge Andrew Carter.
The investors allege that Binance failed to warn them of the “significant risk” in this investment and sought to recover their capital.
This lawsuit is different from Binance’s recent $4.3 billion penalty, imposed for the violation of federal anti-money laundering and sanctions laws. Founder Changpeng Zhao is scheduled for sentencing on April 30.
BNB price hit a high of $492.30 after two years, post January 2022. The native token’s price is undeterred by the legal battle faced by exchange and its executives.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
