The judge threw the case out on the basis that relevant laws apply when the supposed violation occurs, not when it is detected
Binance, the cryptocurrency exchange, had a class-action lawsuit against it dismissed by a US federal judge.
Judge Andrew Carter threw the case out on the basis that the claims were initiated in some cases over two years from when the coins were first purchased in 2017 and 2018.
Claimants said that a US Securities and Exchange Commission (SEC) framework establishing tokens as securities in April 2020 was the correct time to bring the lawsuit.
Carter declared, however, that relevant laws apply when the supposed violation occurs, not when it is detected.
Domestic US securities laws are also not applicable to Binance, given its headquarters are in the Cayman Islands, according to Judge Carter.
The complaint, which was initiated in April 2020, was bought to the US District Court for the Southern District of New York.
Several investors claimed Binance violated US securities laws by not registering as an exchange, and that the cryptos sold were not registered with the SEC.
The investors said that the tokens had lost most of their valuation and were seeking compensation for the price of the tokens as well as the fees paid to Binance.
They also claimed the exchange capitalised on the crypto hype to market tokens and hold initial coin offerings on behalf of projects and profiting from the associated fees.
Similar lawsuits have been filed against other cryptocurrency exchanges, with Coinbase currently engaged in a legal battle for allegedly operating as an unregistered securities exchange in the US.
www.proactiveinvestors.com