The U.S. Supreme Court recently denied Binance's appeal over a lawsuit concerning the sale of unregistered cryptocurrency, highlighting ongoing legal issues in the industry.
Supreme Court Decision on Binance Lawsuit
On January 13, 2025, the U.S. Supreme Court rejected Binance's appeal to dismiss a lawsuit alleging illegal sale of unregistered tokens. The class-action lawsuit, filed by investors, claims Binance failed to warn buyers of 'significant risks' associated with certain tokens, including ELF, EOS, FUN, ICX, OMG, QSP, and TRX.
Binance's Legal Defense and Appeal Details
Binance argued that U.S. securities laws should not apply to its operations, citing the 2010 Supreme Court decision in Morrison v. National Australia Bank, which limits U.S. securities laws' extraterritorial application. However, the 2nd U.S. Circuit Court of Appeals allowed liability across multiple stages of securities transactions, including those with U.S. effects.
Implications for the Crypto Industry
This lawsuit adds to Binance's increasing legal challenges. In November 2023, Binance pleaded guilty to violating federal anti-money laundering and sanctions laws, resulting in a record $4.3 billion penalty. Founder Changpeng Zhao was sentenced to four months in prison and released in September 2024, highlighting increased regulatory scrutiny facing Binance and the broader cryptocurrency market.
The Supreme Court's decision to let the lawsuit proceed against Binance marks a turning point in the enforcement of securities laws on international crypto platforms. As the case develops, its implications for Binance and the cryptocurrency industry will be closely watched by regulators, investors, and market participants.
