Binance Won Dismissal Over 2018 Class Action For Tokens That Tanked

Binance won dismissal over the 2018 class-action lawsuit for the tokens that tanked and the judge ruled domestic law doesn’t apply to the exchange and it is not an exchange domestic to the US saying that the case was filed too late so let’s read more in today’s latest Binance news.

The federal judge dismissed the class action complaint asserting that Binance violated US securities laws by not registering as a broker-dealer or an exchange and managed to sell tokens that were not registered with the US SEC. Binance won the dismissal today. The original complaint filed in the US District Court for the Southern District of New York was launched by investors that invested in EOS, BNT, SNT, KNC, TRX, QSP, ICX, FUN, LEND, ELF, CVC between 2017 and 2018. The amended complaint was filed listing nine tokens with CVC, BNT and SMT removed.

The investors said that the tokens lost most of their value since buying and were looking for compensation for the paid prices and the fees paid to the exchange in connection with the purchase.

“Binance and the Issuers wrongfully engaged in millions of transactions, including the solicitation, offer, and sale of securities, without registering the Tokens as securities, and without Binance registering with the SEC as an exchange or broker-dealer. As a result, investors were not informed of the significant risks inherent in these investments, as federal and state securities laws require.”

The investors claimed that Binance capitalized on the enthusiasm brought on by crypto, marketing tokens, and ICOs and even profited from the associated trading fees, adding that they bought the tokens with a reasonable expectation of making a profit. The judge however said that the investors waited more than a year after buying the tokens to file the complaint and sued a little too late. Most of the tokens were bought in 2018 and the original filing wasn’t until April 2020.

The investors argued that the SEC published a new framework asserting that the digital tokens were securities and that the timeline for complaint submission should have already started but Carter found that the laws apply when the supposed violation happens and not when it is detected. Judge Carter even said that the domestic securities laws are not applicable to Binance and it is not a domestic exchange in the US so the exchange does use Amazon Web Services to host the infrastrcuture and that it is based in the US but this doesn’t consider the exchange as a domestic exchange. Carter wrote:

“Plaintiffs must allege more than stating that plaintiffs bought tokens while located in the U.S. and that title passed in whole or in part over servers located in California that host Binance’s website.”