There is new legal information about a class-action lawsuit against Binance. The case has been filed by Tevj, who alleges that US and CoinMarketCap manipulated the price of the HEX token. In the recent past, one lower court dismissed the suit, but recently, the U. S. Court of Appeals for the Ninth Circuit has partially regained the situation and has allowed the lawsuit to continue.
Based on this judicial decision, it can be understood that Ryan Cox has prosecutable claims against both Binance. US and CoinMarketCap based on the allegations of artificially inflating the price of HEX cryptocurrency.
Allegations of Market Manipulation
The class-action suit alleges that both companies engaged in illicit practices that led to the artificial deflation of the HEX token’s value. This legal battle started when Cox initiated his lawsuit in 2021, claiming that Binance Capital Management and its U.S. arm, Binance.US, intentionally affected HEX’s ranking on CoinMarketCap—a price-tracking service for cryptocurrencies owned by Binance. Per the allegations, this manipulation resulted in HEX trading at a significantly lower price than other cryptocurrencies featured on the platform.
District Court Dismissal and Appeal
In February 2023, the district court initially dismissed the lawsuit, asserting that Cox had not adequately shown a direct link between Binance.US’s operations and the claimed price manipulation in Arizona, where the lawsuit was filed. The judge concluded that the plaintiff did not provide enough evidence to substantiate his allegations, leading to the dismissal of the case.
However, on August 12, a panel of three judges from the Ninth Circuit Court of Appeals disagreed with the lower court’s ruling. The appeals court underscored that the plaintiff indeed presented valid claims against both defendants, countering the district court’s interpretation regarding personal jurisdiction. The panel clarified that the requirement for “sufficient minimum contacts” between Binance.US and Arizona was a misapplication of the law. Instead, they indicated that the district court had the authority to proceed since both Binance.US and CoinMarketCap maintained significant connections to the broader U.S. marketplace.
The appeals court also pointed out that, given the incorporation and primary operating locations of the involved companies, they possessed sufficient ties to the U.S. to satisfy the legal standards for due process. The judges emphasized that the defendants had “adequate contacts with the United States” to warrant legal action against them, marking a pivotal shift in the case’s direction.
This ruling not only influences the current legal challenge but also may establish a precedent for future legal actions involving cryptocurrency exchanges and claims of market manipulation. Legal analysts and industry insiders will be vigilant in observing how this case unfolds, especially in light of the increasing scrutiny faced by the cryptocurrency sector regarding regulatory adherence and ethical trading standards.
As the case moves forward, the legal ramifications may extend beyond the immediate parties involved, potentially shaping how regulatory organizations address similar claims in the future. The appeals court’s decision demonstrates a readiness to grapple with the intricate aspects of cryptocurrency operations and the legal criteria for jurisdiction in these matters.
The Future of HEX and Its Legal Battles
With respect to the HEX token itself, it is currently trading around $0.004, representing a staggering decrease of over 99% from its peak of $0.51, achieved in September 2021. This reduction in value arose in the context of broader market fluctuations and negative sentiment concerning the token’s viability. Recently, HEX’s founder, Richard Heart, expressed dissatisfaction with the token’s performance on the Ethereum network, which further influenced the traders’ sentiments and contributed to a notable price drop soon after his remarks.
The lawsuit is set against a backdrop of ongoing examination by U.S. regulatory authorities. The U.S. Securities and Exchange Commission (SEC) is currently entangled in its own legal issues involving HEX and its founder. Recently, the SEC launched a lawsuit against Heart, accusing him of breaching federal securities statutes and deceiving investors, alleging he raised a minimum of $12.1 million through misleading tactics. The SEC’s claims suggest that instead of utilizing investor funds for the advancement of HEX, Heart purportedly diverted money into luxurious expenditures, such as high-end vehicles, watches, and jewelry.
As these legal proceedings unfold, both the class-action lawsuit and the fate of the HEX token remain uncertain. The Ninth Circuit’s partial reversal revitalises the allegations against Binance.US and CoinMarketCap, paving the way for deeper legal examination of their activities in the cryptocurrency market.
