A US appeals court has partially overturned the dismissal of a class-action lawsuit against Binance.US, the United States subsidiary of the global Binance exchange, according to an Aug. 12 court filing.
The court found that the plaintiff, Ryan Cox, had valid claims against both Binance.US and CoinMarketCap over accusations that the crypto platforms manipulated the price of the Hex token.
The Lawsuit
In 2021, Cox filed a class-action lawsuit against Binance Capital Management and Binance.US, accusing them of manipulating HEX’s ranking on CoinMarketCap—a digital asset price-tracking platform owned by Binance.
Cox claimed that HEX was “the best-performing cryptocurrency of 2020.” He alleged that the defendants unlawfully suppressed HEX’s value for their financial benefit while inflating the value of other cryptocurrencies.
In February 2023, a district court judge dismissed the case, stating that Cox had not proven a direct connection between Binance.US’s activities and Arizona, where the case was filed.
However, the appellate court reversed this decision. It noted that the district court had personal jurisdiction over the defendants due to their significant presence in the US. The judges stated:
“The panel concluded that the district court had personal jurisdiction over the US defendants under the Act because they had sufficient contacts with the United States to satisfy due process.”
Price Manipulation
Further, the appeals court upheld Cox’s claims of price manipulation against Binance.US and sent the case back for further legal action. The ruling stated:
“The panel also concluded that the complaint alleged colorable price manipulation claims against the U.S. defendants. The panel therefore reversed the district court’s dismissal of the claims under the Act against those defendants and remanded for further proceedings.”
HEX is a digital asset launched in 2019 by Richard Heart. Since its launch, it has been the subject of several controversies and labeled a security token by the US Securities and Exchange Commission (SEC).
Heart has also been sued for violating federal securities laws and defrauding investors of at least $12.1 million.