Appeals Court Revives Aspiring Class Action Lawsuit Against Binance
A group of investors who attempted to sue Binance, its former CEO Changpeng Zhao, and other executives have been given a new chance after the Second Circuit Court of Appeals reversed a lower court ruling dismissing the case.
The suit was brought in April 2020 by a group of investors who alleged they purchased securities from Binance, including the ERC-20 tokens EOS, TRX, ELF, FUN, ICX, OMG, and QSP.
The plaintiffs had filed the lawsuit after the statute of limitations expired and that Binance was not a domestic exchange and did not have strong enough ties within the U.S. to meet federal securities laws standards.
The court reversed Judge Carter’s decision and sent the case back to the district court. The plaintiffs “plausibly alleged” that transactions involving the assets in question were finalized on servers within the U.S. and that they had accessed Binance from the U.S.
The circuit court also addressed the timeliness question, stating that the plaintiffs did not start the statute of limitations clock until they purchased the tokens within a year of filing the suit.
(With inputs from Shikha Singh)
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