- The Ninth Circuit Court of Appeals has reinstated a class-action lawsuit against Binance.US.
- The lawsuit alleges that Binance.US and CoinMarketCap manipulated the HEX token’s ranking and price.
- The court’s decision emphasizes jurisdictional connections, allowing the case to continue.
Explore the revived class-action lawsuit against Binance.US, focusing on alleged HEX token price manipulation and its broader implications for the cryptocurrency industry.
Ninth Circuit Court of Appeals Revives Lawsuit Against Binance.US
The United States Ninth Circuit Court of Appeals has breathed new life into a class-action lawsuit against Binance.US. This case, which accuses the cryptocurrency exchange and CoinMarketCap of price manipulation related to the HEX token, had previously been dismissed but is now set to proceed. The appeals court’s decision, dated August 12, underscores significant jurisdictional connections that justify the continuation of the lawsuit.
Allegations of Unlawful HEX Token Manipulation
Filed originally in 2021, the lawsuit brought forth by plaintiff Ryan Cox accuses Binance.US and CoinMarketCap of manipulating the HEX token’s ranking and market price. Cox claims that these entities artificially restricted HEX’s ranking on CoinMarketCap, a platform known for tracking cryptocurrency prices. According to Cox, this manipulation led to HEX trading at prices lower than other cryptocurrencies listed on Binance.
Appeals Court’s Rationale for Reinstatement
The three-judge panel from the Ninth Circuit found flaws in the district court’s initial ruling, which had dismissed the lawsuit due to a perceived lack of jurisdiction. The district court had argued that Cox failed to establish sufficient connections between the alleged manipulative actions and Arizona. However, the appeals court highlighted that both Binance.US and CoinMarketCap have substantial ties to the broader United States, meeting the due process requirements for personal jurisdiction. This pivotal finding allowed for the revival of the lawsuit, setting the stage for further legal scrutiny.
SEC Actions Against HEX and Richard Heart
This legal development occurs amid ongoing scrutiny of the HEX token and its founder, Richard Heart. On July 31, 2023, the U.S. Securities and Exchange Commission (SEC) filed a separate lawsuit against Heart. This case alleges that Heart violated federal securities laws and misappropriated at least $12.1 million from investors for personal luxury items, including a massive diamond, luxury watches, and high-end cars. The broader legal challenges faced by HEX and its founder further complicate the context within which the Binance.US lawsuit is unfolding.
Implications for the Cryptocurrency Industry
The revived lawsuit against Binance.US carries significant implications for the cryptocurrency sector, particularly in terms of how U.S. courts might handle jurisdictional issues in digital asset-related cases. If the allegations of HEX token price manipulation are substantiated, it could set a legal precedent with far-reaching consequences for crypto exchanges and price-tracking platforms. Regulatory scrutiny and legal challenges such as these highlight the evolving landscape of oversight in the rapidly growing cryptocurrency market.
Conclusion
The Ninth Circuit Court of Appeals’ decision to reinstate the lawsuit against Binance.US marks an important development in the ongoing regulation and oversight of the cryptocurrency industry. As the case advances, it will be critical to observe how the courts address allegations of price manipulation and jurisdictional questions, potentially reshaping legal standards for digital asset exchanges in the United States. Both the plaintiff and broader market participants will keenly follow these proceedings, which may influence future regulatory frameworks and enforcement actions in the sector.
