A federal judge has dismissed a class action lawsuit that was filed against one of the world’s largest cryptocurrency exchanges, Binance as far back as 2018. Claimants accused Binance of violating U.S. securities laws by selling unregistered tokens and failing to register as an exchange or broker-dealer.
More specifically, the 327-page complaint claimed that Binance wrongfully engaged in millions of transactions and failed to warn investors about the significant risks of buying certain tokens.
The group of investors bought OS, BNT, SNT, QSP, KNC, TRX, FUN, ICX, OMG, LEND, ELF and CVC tokens between 2017-2018 but argued that since the tokens lost much of their value post-purchase, Binance ought to pay them compensation.
However, the U.S. District Judge Andrew Carter has dismissed the lawsuit, expressing that the investors sued too late since they waited more than a year after their purchases to take legal action.
Carter also stated that 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 said.
Last month, a similar lawsuit was filed against Coinbase in the same court, alleging that the exchange is operating as an unregistered securities exchange.