A class action complaint on Binance was dismissed by a federal judge. According to the case complaint, the largest crypto exchange company by market volume has broken, or in another word, violated the security laws of the United States by not submitting as an exchange or broker while selling the cryptocurrency tokens that have not been registered with the United States Securities and Exchange Commission (SEC).
A group of investors filed the original complaint against Binance in the U.S. District Court for the Southern District of New York. The group had claimed that in the years 2017 and 2018, they had invested in several different crypto tokens, including CVC, BNT, FUN, EOS, SNT, TRX, ICX, QSP, OMG, ELF, KNC, and LEND. But in the amended complaint, only nine tokens were listed, and CVC, BNT, and SMT were removed from the file.
After their purchase in the platform, the tokens lost most of their value, and the investors were asking for compensation from Binance for the price paid for buying those tokens and the fees they had to pay to the exchange platform in connection with their acquisition. While giving his verdict on Thursday, judge Andrew Carter stated that the waiting time of the investors was too long, more than a year after the purchase of the tokens to lodge the complaint. The maximum amount of tokens were purchased in the year 2018, and the complaint was filed in April 2020.
To counter the argument, the investors stated that the U.S. Securities and Exchange Commission (SEC) published a rulebook declaring that the digital tokens would be considered securities in April 2020, and the right time for filing the complaint was at that time, which they did. But the judge Carter found out that the law applies when the violation occurs, not when it is found.