Binance is set to face a class action lawsuit after the U.S. Supreme Court declined to intervene in a case against the company and its founder, Changpeng “CZ” Zhao. This ruling permits investors to continue pursuing claims in lower courts, alleging that Binance sold digital assets as investments, which later lost significant value.
The lawsuit asserts that Binance marketed certain digital assets as viable investments, but the value of these assets subsequently declined. Initially, a U.S. appeals court determined that these transactions were subject to American law, a decision Binance and CZ attempted to challenge. However, the Supreme Court’s refusal to block the case now allows it to proceed.
Binance has been embroiled in multiple legal challenges, particularly in the United States. The U.S. Securities and Exchange Commission (SEC) has accused the exchange of offering unregistered securities, a lawsuit Binance is currently attempting to have dismissed. In addition, FTX, a rival crypto firm, filed a $1.8 billion lawsuit against Binance in November 2024.
Despite these legal hurdles, Binance has made strides in its recovery. In late 2023, the company reached a settlement with the U.S. Department of Justice (DoJ), which led to CZ stepping down as CEO and briefly serving jail time. Under the leadership of Rechd Teng, Binance secured regulatory approvals in countries like Brazil, expanded its services, and grew its user base.
Binance is not alone in facing regulatory scrutiny. Its competitor, Coinbase, is also in a legal battle with the SEC over whether specific tokens qualify as securities. However, Coinbase recently scored a minor victory when a judge allowed it to continue arguing its case in court.
With increasing regulatory pressure on major crypto exchanges, both Binance and Coinbase are facing an uncertain future. Some industry observers believe that a potential pro-crypto stance from a future Donald Trump administration could provide relief to the sector.
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