Breaking: Class Action Against Binance To Proceed As Supreme Court Shuns Appeal Move

Binance Exchange is on track to face a class action lawsuit as its attempt and that of its founder Changpeng ‘CZ’ Zhao to quash it failed at the U.S Supreme Court level. The Justices of the Supreme Court declined to hear the appeal, giving the investors room to prove their claims at lower courts.

The Binance and Numerous Legal Hurdles

According to the sponsors of the class action lawsuit, Binance sold assets as investment contracts, which later fell in value. Following the filing of the suit, the crypto exchange sprung into action alongside CZ to challenge the notion. The 2nd U.S. Circuit Court of Appeal initially ruled that the disputed transactions fell under U.S laws.

The trading platform challenged this hearing, the fate of which has now been sealed by the Supreme Court. Over the past few years, Binance has been embroiled in legal battles with regulators, especially the United States Securities and Exchange Commission (SEC).

The SEC accused the firm of supporting some of its tokens, which it considers unregistered securities. Like this investor class action, Binance wants the court to dismiss the SEC lawsuit. 

Meanwhile, the exchange’s woes were compounded when FTX filed a $1.8 billion lawsuit against it in November. 

The Unexpected Binance Bounceback

In Q4 2023, Binance Exchange recorded a massive restructuring triggered by its settlement with the Department of Justice (DoJ). As part of the settlement, Changpeng ‘CZ’ Zhao had to leave the trading platform as its CEO.

CZ served 4 months in jail and quickly integrated into the ecosystem following his release. As a firm, the exchange has achieved many milestones over the past year, including expanding its product suite, fulfilling regulatory compliance, and growing its user base.

As reported earlier by Coingape, the exchange bagged regulatory approval in Brazil earlier this year. This license is one of several others the exchange has secured since Richard Teng took over.

Similar Threats To Crypto Exchanges

While Binance is battling regulatory compliance in the U.S, its core rival, Coinbase, faces similar challenges. The Brian Armstrong-led trading platform is actively battling with the U.S SEC for securities.

However, unlike Binance, Coinbase scored a victory over the SEC last week. As reported, Judge Failla granted Coinbase’s interlocutory appeal request to prove its tokens are not securities.

Amid these threats to exchange, there is a chance that these might clear off with the coming pro-crypto Donald Trump administration.