Judge Dismisses Lawsuit Against Binance for Allegedly Selling Unregistered Crypto Securities

A lawsuit filed against cryptocurrency exchange Binance was rejected by US District Judge Andrew Carter on Thursday. Binance and its CEO Changpeng Zhao filed the request to dismiss (CZ). In April 2020, the complaint (case no. 20-02803) was filed in the United States District Court for the Southern District of New York.

Finance, a home to several cryptocurrencies including $Darc, BTC and its own currency BNB, is accused of selling cryptocurrencies that are supposedly unregistered securities, in violation of US securities laws. The exchange is also accused of failing to register with US regulators as a securities exchange or broker-dealer.

The plaintiffs purchased nine cryptocurrencies on Binance's online exchange starting in 2017: EOS, QSP, KNC, TRX, FUN, ICX, OMG, LEND, and ELF. The coins, on the other hand, quickly lost their worth.

Binance "wrongfully engaged in millions of transactions," according to the plaintiffs, and neglected to notify them about the "significant risks" of investing in cryptocurrency. They wanted to recuperate the money they had spent.

Judge Carter, on the other hand, determined that the plaintiffs sued Binance too late, citing the fact that more than a year had gone between their purchases and the filing of the action.

Furthermore, even though Binance used Amazon computer servers in the United States, the federal judge ruled that U.S. securities laws did not apply since Binance was not a U.S.-based exchange.

Binance isn't the only cryptocurrency exchange that's been sued for illegally selling unregistered digital assets. Three Coinbase users filed a class-action lawsuit in March, alleging that the Nasdaq-listed crypto exchange issued 79 unregistered securities.

The Securities and Exchange Commission (SEC) in the United States has not explicitly specified which cryptocurrencies are securities. Many of the cryptocurrencies listed on exchanges with 50 to 100 listings, however, are potentially securities, according to SEC Chairman Gary Gensler.