A United States appeals court has partially overturned a previous dismissal of a class-action lawsuit against Binance.US. The lawsuit accuses the cryptocurrency exchange of unlawfully manipulating the price of the HEX token.
A panel of three judges from the Ninth Circuit ruled on August 12 that the plaintiff, Ryan Cox, had presented valid claims against Binance.US and CoinMarketCap. The panel disagreed with a district court’s earlier dismissal, which had found that Cox failed to establish a sufficient connection between specific actions in Arizona and Binance.US.
Appeals Court Upholds Claims
Cox initially filed the class-action lawsuit in 2021. He alleged that Binance Capital Management and Binance.US had artificially restricted the HEX token’s ranking on CoinMarketCap. CoinMarketCap is a cryptocurrency price-tracking platform owned by Binance.
According to Cox, this manipulation caused HEX to trade at a lower price compared to Binance's owncryptocurrencies, which were ranked higher.
The district court dismissed the lawsuit in February 2023. The judge had concluded that Cox did not prove a concrete link between Binance.US’s activities and the alleged manipulation of HEX in Arizona.
However, the Ninth Circuit panel found that the district court's requirement for establishing "sufficient minimum contacts" between Binance.US and Arizona was incorrect. The appeals court stated that the district court had personal jurisdiction over the defendants because they had significant contacts with the broader United States.
U.S. court reopens HEX manipulation case against https://t.co/ryPvR1aYUCA U.S. appeals court has rebooted a class-action lawsuit against https://t.co/ryPvR1aYUC regarding the HEX token manipulation case, Cointelegraph reported. https://t.co/ryPvR1aYUC was previously accused of…
— CoinNess Global (@CoinnessGL) August 13, 2024
HEX Token Value Plummets
The panel’s opinion noted that both Binance.US and CoinMarketCap have sufficient connections with the U.S. due to their incorporation or principal place of business within the country. This satisfies the due process requirements for personal jurisdiction.
The appeals court also determined that Cox's claims of price manipulation against Binance.US were valid. The case has been remanded for further legal proceedings.
The HEX token was launched in December 2019 by Richard Heart. On July 31, 2023, the SEC filed a lawsuit against Heart for violating federal securities laws and defrauding investors of at least $12.1 million. The SEC alleged that Heart used investor funds for personal luxury purchases, including a 555-carat diamond, expensive watches, and high-end cars.
Currently, the HEX token is trading at $0.004, a decline of over 99% from its all-time high of $0.51 in September 2021.
This article was written by Tareq Sikder at www.financemagnates.com.
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