Binance faces most crypto lawsuits in US SEC, judge rules

(Reuters) – A federal judge ruled late Friday that much of a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Binance, the world’s largest cryptocurrency exchange, can proceed.

The decision by Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia is a blow to Binance, which had asked the court to dismiss an SEC lawsuit accusing Binance and its founder and former CEO Changpeng Zhao of violating securities laws.

The SEC lawsuit filed against Binance in June 2023 accused the exchange and Zhao of artificially inflating trading volume, misappropriating customer funds, failing to restrict U.S. customers from using its platform and misleading investors about market surveillance controls.

The regulator also accused Binance of unlawfully facilitating the trading of several crypto tokens that the SEC has deemed to be unregistered securities.

The ruling deepened the exchange’s problems after Binance in November agreed to pay $4.3 billion in a settlement with the Department of Justice and the Commodity Futures Trading Commission over financial regulatory violations.

Still, Friday’s ruling marks a partial victory for the broader cryptocurrency sector, as it sided with the previous judge in finding that the SEC failed to make its case that secondary sales of Binance tokens — sold by sellers other than Binance on exchanges — were not securities.

(Reporting by Gnaneshwar Rajan in Bengaluru and Hannah Lang in Washington; Editing by Diane Craft)

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