Crypto: The US Supreme Court validates collective proceedings against Binance

Cryptos have been operating in regulatory limbo for years, but the latest decision from the US Supreme Court represents a watershed moment for Binance. By rejecting the platform's request, the highest American court confirms that securities laws apply to transactions carried out on its servers, even if the company does not have a physical headquarters in the United States. This verdict paves the way for a class action brought by investors, who accuse Binance of having sold unregistered cryptos. Already under pressure after a series of lawsuits and a multibillion-dollar settlement with the Department of Justice, the exchange and its former CEO, Changpeng Zhao, are seeing legal challenges intensify. This setback poses a key question: is the United States imposing its authority on the entire global crypto market?

A towering judge, dressed in traditional black robes, with a stern face and raised hand, ready to strike with a massive judge's gavel symbolizing the rejection of Binance's appeal.

A legal decision with serious consequences

On January 13, the US Supreme Court rejected Binance's request to challenge a lower court ruling. The latter had considered that American securities laws applied to transactions carried out on the platform, on the grounds that they were finalized on servers located in the United States. Thus, even if Binance does not have a physical headquarters on American territory, the courts consider that its activities fall within the scope of financial regulation in the United States due to the location of certain technical infrastructures.

This case originated in April 2020, when Chase Williams, an investor, filed a complaint that accused Binance of selling unregistered financial securities. According to him, the platform would have allowed the purchase of tokens considered as securities without respecting the legal obligations imposed by the American authorities. In March 2023, a federal court validated the continuation of this class action, because for it, the American jurisdiction had jurisdiction due to the place of execution of the transactions. Through the challenge to this interpretation, Binance appealed to the Supreme Court, and argues that the rise of new technologies allowed investors to access foreign platforms without being subject to local laws. This argument, however, did not convince the judges, who refused to examine the file, which opens the way for the continuation of the procedure against the exchange.

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Major implications for Binance and the crypto sector

With this rejection by the Supreme Court, Binance faces a new legal front in the United States, which adds to a series of litigation already underway. Since 2023, the platform has been in the sights of American regulators, notably the Securities and Exchange Commission (SEC), which accuses it, as well as its former CEO Changpeng Zhao, of having offered illegal financial services to American investors. This regulatory pressure came to a head last November, when Binance reached a settlement with the Department of Justice (DOJ). Thus, the exchange agreed to pay $4.3 billion to end prosecutions related to violations of laws against money laundering and terrorist financing.

Binance's legal troubles extend beyond the United States. In April 2023, the platform was targeted by a class action in Canada, which accuses it of similar offenses in the regulation of financial securities. In addition, the FTX estate has filed lawsuits against Binance and Changpeng Zhao, and is demanding $1.8 billion from them for a controversial share sale in 2021. This case comes in the context of the collapse of FTX , which has led to legal and financial tensions within the crypto ecosystem.

Beyond the direct repercussions for Binance, this affair could redefine the regulatory framework for crypto exchanges that operate internationally. Thanks to the validation of the application of American laws to foreign platforms, the Supreme Court opens the way to strengthening the control of financial authorities over offshore companies. This decision could prompt other regulators to adopt a similar approach, thereby complicating the compliance strategy of industry players. If Binance fails to contain these legal attacks, other exchanges could be forced to quickly adapt their operations to avoid the same fate.

As the crypto industry calls for clearer regulation, the Supreme Court's decision constitutes a decisive turn in the standoff between American authorities and large exchange platforms. Thanks to the validation of the application of securities laws to transactions carried out on Binance, American justice is paving the way for increased control of foreign exchanges operating in the United States. This precedent could encourage other regulators to adopt similar measures, thereby increasing pressure on the entire sector. It remains to be seen whether Binance will manage to contain the impact of this collective action, or whether this decision will initiate a wave of more severe sanctions, which risks redrawing the rules of the game for the global crypto ecosystem.

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