Jonathan Stempel

NEW YORK (Reuters), A Federal Judge dismissed a lawsuit against Binance. Binance is the biggest cryptocurrency exchange worldwide by trading volume. It was accused of violating U.S. Securities laws by selling non-registered tokens, failing to register as an Exchange or Broker-dealer and by selling illegal tokens.

Digital token investors brought the lawsuit in Manhattan after they bought nine tokens -. QSP, KNC and TRX – via Binance’s online platform in 2017. They soon lost a lot of their value.

Investors filed a 327-page lawsuit against Binance alleging it “wrongfully participated in millions” of transactions and that Binance failed to warn them about “significant risks” associated with buying tokens. They sought to recover what they had paid.

Andrew Carter (U.S. District Court Judge) said that investors were too late to sue because they had waited for more than a year following their purchase.

He said that domestic securities laws didn’t apply to Binance because it was not an exchange domestically, even though Binance used Amazon (NASDAQ) computers servers and Blockchain computers in the United States.

Carter stated that plaintiffs cannot simply allege that they bought tokens in the U.S., and that their title was transferred in whole or part to servers in California hosting Binance’s website.

Kyle Roche (a lawyer for Roche Freedman investors) declined to comment. Binance and its attorneys did not respond immediately to inquiries for comment.

Investors claimed that the statute of limitations started exactly one year prior to their April 2020 suit. This was when the U.S. Securities and Exchange Commission published a framework that characterizes their tokens and securities.

Binance’s corporate structure is opaque, and Binance holds a Cayman Islands-registered holding company. Changpeng Zhao (founder and Chief Executive) stated that Binance had plans to open “a few” headquarters all over the world.

Anderson et al v Binance et al. U.S. District Court Southern District of New York. 20-02803.