The Ninth Circuit Court of Appeals revived a class-action lawsuit against Binance US for Hex token price manipulation.
A U.S. appeals court has revived parts of a class-action lawsuit against Binance US, one of the largest cryptocurrency exchanges globally.
The lawsuit, which accuses the exchange of manipulating the price of the HEX token, had been previously dismissed but is now partially reinstated.
Appeals Court Revives Lawsuit Against Binance US
The United States Ninth Circuit Court of Appeals has partially overturned the dismissal of a class-action lawsuit involving Binance US.
However, the lawsuit, which focuses on alleged price manipulation of the HEX cryptocurrency token, was given a new chance following the court’s ruling on August 12.
Initially filed in 2021 by plaintiff Ryan Cox, the case accuses Binance US and CoinMarketCap of unlawfully manipulating the price of HEX.
Moreover, Cox claims these entities deliberately restricted HEX’s ranking on CoinMarketCap, a cryptocurrency price-tracking platform owned by Binance, causing it to trade at lower prices than other cryptocurrencies listed on Binance.
A panel of three judges disagreed with the earlier decision by the district court, which had dismissed the case on the grounds that Cox did not establish a sufficient connection between specific actions in Arizona and Binance US.
The appeals court determined that the district court’s standard for establishing “sufficient minimum contacts” was incorrect.
The panel noted that both Binance US and CoinMarketCap have significant ties to the broader United States due to their incorporation or principal business locations within the country.
The judges concluded that these connections meet the due process requirements for personal jurisdiction, and they found Cox’s claims of price manipulation against Binance.US to be valid.
As a result, the case has been sent back for further legal proceedings.
This ruling comes amidst heightened scrutiny of the HEX token and its founder, Richard Heart. On July 31, 2023, the SEC filed a separate lawsuit against Heart, accusing him of violating federal securities laws and defrauding investors of at least $12.1 million.
The SEC alleges that Heart misused investor funds for luxury purchases, including a 555-carat diamond, expensive watches, and high-end cars.
Reviving this lawsuit against Binance US adds another layer of complexity to the ongoing legal challenges in the cryptocurrency industry.
It may also set precedents for how U.S. courts handle jurisdiction in cases involving digital asset exchanges and allegations of price manipulation.
Binance Celebrates Partial Victory in SEC Case
In another legal matter, Binance is celebrating a significant milestone in its ongoing dispute with the U.S. Securities and Exchange Commission (SEC).
A federal court recently dismissed several of the SEC’s major claims against the exchange, including rulings that crypto tokens are not securities.
Additionally, the court found that sales of Binance Coin (BNB) on secondary exchanges were not sufficiently alleged to be securities, and Binance’s stablecoin, BUSD, was not classified as a security.
Binance hailed this decision as a victory for the entire cryptocurrency industry, while Binance US stated it is ready for the next phases of this legal battle.
