According to a federal court on Thursday, a case against Binance, the world’s biggest cryptocurrency exchange by trading volume, for breach of United States securities laws by not registering as a broker-dealer or exchange, was dismissed.
About the Case
Nine virtual token investors who purchased EOS, QSP, KNC, TRX, and FUN on Binance’s online exchange beginning in 2017 and who quickly lost substantially all of their value have filed a lawsuit in Manhattan against the exchange.
The investors claimed that the tokens’ value had plummeted since their acquisition and wanted reimbursement for both the tokens’ purchase price and the fees paid to Binance.
Another allegation made by the investors was that Binance took advantage of the cryptocurrencies to promote token sales and initial coin offerings (ICOs) on behalf of various projects, profiting from the accompanying trading fees.
A year before their April 2020 complaint, the investors claimed the statute of limitations started running when the US Securities and Exchange Commission produced a “framework” describing their tokens as securities.
According to investors, a timetable for bringing complaints should have begun when the SEC issued a framework in April 2020, asserting that digital tokens were securities. However, Carter determined that the applicable rules apply when the claimed violation happens, not when it is identified.
Cases on exchanges are getting more regular
Similar class-action lawsuits have been filed against a number of other cryptocurrency exchanges. Since March 11, when a complaint was filed, Coinbase has been accused of functioning as an unregistered stock exchange. Plaintiffs claim that Coinbase failed to warn them about the risks of investing in bitcoin in a similar manner.