Binance Wins Dismissal Of U.S. Lawsuit Over Digital Token Sales

A federal judge dismissed a case alleging Binance, the world’s largest cryptocurrency exchange by trading volume, of selling unregistered tokens and failing to register as an exchange or broker-dealer in violation of US securities laws.

The case was filed in Manhattan by digital token investors who purchased nine tokens – EOS, QSP, KNC, TRX, FUN, ICX, OMG, LEND, and ELF – through Binance’s online exchange beginning in 2017 and saw their value plummet.

In a 327-page complaint, the investors claimed that Binance “wrongfully engaged in millions of transactions” and failed to warn them about the “significant risks” of buying the tokens, and sought to recoup what they paid.

U.S. District Judge Andrew Carter, however, said the investors sued too late, having waited more than one year after their purchases.

Domestic securities laws did not apply because Binance was not a domestic exchange

Even if it used Amazon computer servers and Ethereum blockchain computers in the United States.

“Plaintiffs must allege more than stating that plaintiffs bought tokens while located in the U.S. and that title passed in whole or in part over servers located in California that host Binance’s website,” Carter wrote.

Roche Freedman’s Kyle Roche, a lawyer for the investors, declined to comment. Requests for comment from Binance and its lawyers were not immediately returned.

The investors claimed that the statute of limitations started running one year before their April 2020 lawsuit, when the Securities and Exchange Commission issued a “framework” classifying their tokens as securities.

Roche Freedman’s Kyle Roche, a lawyer for the investors, declined to comment. Requests for comment from Binance and its lawyers were not immediately returned.

The investors claimed that the statute of limitations started running one year before their April 2020 lawsuit, when the Securities and Exchange Commission issued a “framework” classifying their tokens as securities.

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