petition rejected by the Supreme Court

The cryptocurrency exchange platform Binance and its founder, Changpeng “CZ” Zhao, are at the center of a class action that could have significant repercussions for the entire cryptocurrency sector. 

On January 13, 2025, the Supreme Court of the United States rejected a petition filed by Binance to review a lower court’s ruling, thus paving the way for a class action lawsuit filed by a group of investors.

The heart of the class action at Binance: unregistered securities and U.S. laws

The lawsuit was originally initiated in April 2020 by Chase Williams, who represents a group of investors. The plaintiffs claim that Binance illegally sold unregistered securities through its platform. 

According to the allegations, American users have suffered significant losses due to transactions made on Binance, which, despite not being based in the United States, uses servers located in the country and allows transactions in American dollars.

In March 2023, a lower court had ruled that the lawsuit could proceed, as the transactions on the tokens were finalized in the United States. 

Binance has appealed against this decision, arguing that the platform operates in a globally interconnected ecosystem, where the securities laws of a single country should not have jurisdiction over the activities of an exchange without a physical presence in the territory. 

However, the Supreme Court decided not to review the case, implicitly confirming the validity of the lower court’s ruling.

The accusations against Binance and CZ

The legal entanglements for Binance and CZ have multiplied in recent years. Among the accusations against the giant of criptovalute are:

• Sale of unregistered securities: the Securities and Exchange Commission (SEC) sued Binance in 2023 for illegally offering securities to American investors without proper registrations.
• Money laundering: in November 2023, Binance reached a record agreement of 4.3 billion dollars with the United States Department of Justice, admitting violations of money laundering and terrorism financing laws.
• International causes: Binance has been subject to legal actions in Canada and involved in disputes with other crypto companies, including a citation from the FTX bankruptcy estate for an alleged fraudulent deal worth 1.8 billion dollars.

In the context of these accusations, the founder CZ also faced personal accusations. In 2024, he pleaded guilty to money laundering and failure to implement anti-money laundering controls, serving a sentence of four months in prison.

What can lead to the crypto market?

The decision of the Supreme Court not to intervene represents a significant setback for Binance.

The class action can now proceed, putting further pressure on a platform already under global scrutiny. This case could set an important precedent, defining the boundaries of the jurisdiction of U.S. laws on cryptocurrencies in a global and decentralized market.

The legal action against Binance also raises crucial questions about the regulation of the crypto sector. On one hand, these cases highlight the need for greater transparency and accountability from the exchanges. 

On the other hand, the growing involvement of the US authorities demonstrates an increasingly strict approach towards an industry that seeks to balance innovation and regulatory compliance.

The future of Binance, the largest cryptocurrency exchange in the world, is now closely tied to the outcome of the ongoing legal disputes. 

The class action might not only affect the financial stability of the exchange, but also change the regulatory landscape for the entire crypto sector. In a moment of increasing legal and regulatory pressure, Binance and CZ face one of the most critical challenges in their history.