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- Binance may face new legal hurdles as the US Supreme Court upheld its chances of being charged with securities violations.
- Amid legal hurdles, Binance has continued to serve retail users and grow.
Binance, the world’s biggest crypto exchange by trading volume, recently received a decision from the US Supreme Court. The court confirmed that Binance is subject to US securities laws even though the exchange’s physical headquarters is not in the United States.
The Binance Court Hurdle
The case centers around Binance offering its services to American clients, not formally having a US office.
The Binance case started with investors accusing the exchange of selling unregistered securities without proper registration, violating the Securities Act of 1933. The plaintiff argued that they lost funds from buying illegal tokens sold on Binance.
Contesting the claims, Binance asserted it is not obligated to comply with US laws since it lacks a physical presence in the country. However, a U.S. district court ruled in March 2024 that Binance must comply with US securities laws. The court pointed out that while Binance has no physical office in the US, it processed transactions through US-based servers.
Binance’s legal team argued that technological advances give investors access to global financial markets. Therefore, they contended that US securities laws should not apply to the exchange.
The Supreme Court’s latest ruling has now opened the way for the case to proceed under US securities laws. It is important to note that this lawsuit is just one among several others Binance is currently facing in the US.
The US Securities and Exchange Commission (SEC) filed a case against Binance and its founder, Changpeng Zhao, in June 2023. As noted in our earlier post, the SEC charged Binance and Zhao with thirteen counts. The charges include running broker-dealers, clearing agencies, unregulated exchanges, and providing services to US customers illegally.
Binance’s legal issues deepened in November 2023 when Zhao pleaded guilty to breaking the Bank Secrecy Act (BSA). The regulator accused Binance of failing to implement a strong anti-money laundering program.
Moving on, Binance agreed to pay $4.3 billion to the U.S. Department of Justice over violations related to money laundering, per a CNF update.
Binance Not Giving Up
Despite its ongoing legal battles, Binance is moving forward with its visions. As mentioned in our previous article, Binance’s CEO Richard Teng unveiled the exchange’s plans to onboard 1 billion users.
The CEO emphasized that the vision will bring the industry closer to making crypto mainstream. He, therefore, called the industry players to join forces to achieve this mission.
Binance has solidified its position as an industry leader with several achievements. The cumulative trading volume on the exchange surpassed $100 trillion, while user assets under custody amount to over $160 billion.
Furthermore, Binance recently announced an expansion of memecoin trading on its platform. As CNF discussed earlier, the Binance Peer-to-Peer (P2P) exchange officially announced new trading pairs for DOGE, SHIB, and PEPE in the African region.
