Recently, a lawsuit was filed against Binance for violating the US Securities law and allegedly selling unregistered crypto securities. There were 9 cryptocurrencies on the list that the plaintiffs reported. But the case didn’t pan out as the motion to dismiss the case by Binance’s CEO was approved by the judge. This must have been a great relief for the exchange, as getting stuck in a securities case would have been difficult.
Judge dismisses lawsuit against Binance
The lawsuit was filed by users of the exchange back in April 2020. It alleged that Binance was selling unregistered securities in the name of crypto and hadn’t even registered itself as a securities broker or exchange. The cryptocurrencies that were involved in the case were FUN, ICX, OMG, QSP, KNC, TRX, EOS, LEND, and ELF. The users bought these through Binance back in 2017, and since then, they have lost a lot of value.
So, the case looked like a squeeze to cover their losses or make some profits. They alleged that Binance didn’t warn them about the risks that were involved with these cryptocurrencies and also engaged in a lot of wrongful transactions. Therefore, the motive behind the lawsuit was clearly not to punish Binance but to get some money.
All these, plus the fact that the plaintiffs filed the case a year after they actually purchased the tokens, was too late, said the judge. The judge also added that Binance is not a US exchange, so the Securities law of the country doesn’t apply to the platform.
What’s happening with exchanges?
After the SEC filed a lawsuit against XRP claiming that it is a security, a lot of exchanges have also been facing charges on similar grounds. But these lawsuits are not filed by authorities but by desperate users who have lost money in their investments and look at this as a chance to recover their money. Even Coinbase faced such a lawsuit where 3 users claimed that 79 listings on the platform were actually unregistered securities. But still, there has been no clear definition of what can be termed security and what cannot.
What are your thoughts as the judge dismisses the lawsuit against Binance because it was filed too late? And does Binance being a non-US company, exclude them from the need to follow US Securities law? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
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