Binance.US, the American arm of cryptocurrency exchange Binance, is facing ongoing legal challenges in the United States. The exchange has already suffered significant damage as a result of a lawsuit filed by the Securities and Exchange Commission (SEC) in June 2023, which led to the termination of over 200 staff members and a decline in revenue. Now, the SEC alleges that Binance.US is unwilling or unable to provide information regarding the custody of customer assets. The regulator has requested court intervention to expedite the discovery process.
At the center of the SEC’s investigation is the question of whether employees of Binance’s non-U.S. division had access to Binance.US customer assets. The SEC claims that Binance.US has failed to prove that it did not have access to private keys or other means of accessing customer assets. In response, Binance.US has refuted the SEC’s allegations, stating that it has complied with the regulator’s extensive requests for information and has asked the court to end the expedited discovery process.
In another legal setback for Binance, a U.S. appeals court has overturned a ruling that dismissed a class-action lawsuit filed by investors against the exchange. The lawsuit, led by investor Chase Williams, alleges that Binance engaged in the sale of securities without being registered as a securities exchange or broker-dealer. The district court initially dismissed the lawsuit on the grounds that it was untimely according to the relevant statute of limitations. However, the appeals court has sided with the plaintiffs, affirming that Binance is subject to U.S. securities laws and that the initial filing was timely.
Meanwhile, the extradition case of Do Kwon, co-founder of Terraform Labs, continues to unfold. A court in Montenegro has once again overturned a lower court’s decision to extradite Kwon to the United States. The Appellate Court of Montenegro ruled that the previous decision to extradite Kwon was marred by significant violations of local criminal procedure laws. This latest development adds to the ongoing dispute between the U.S. and South Korea, both of which have requested Kwon’s extradition.
In Virginia, the state Senate has passed a groundbreaking bill that establishes a workgroup dedicated to studying the crypto ecosystem and making recommendations to promote its growth. The workgroup will consist of 13 members, including legislators from the Senate and House of Delegates, representatives from the blockchain industry, and a representative from local government. The group has until November 1, 2024, to complete its studies and present recommendations for the cryptocurrency ecosystem.
In Spain, the Spanish Agency for the Protection of Data (AEPD) has ordered Worldcoin to cease collecting and processing data in the country. The AEPD issued a temporary order banning Worldcoin’s operations for three months while it investigates complaints that users in Spain are unable to withdraw their consent and that Worldcoin has collected data from minors. This order comes just a month after the Hong Kong Office of the Privacy Commissioner for Personal Data also investigated Worldcoin. The controversy surrounding Worldcoin stems from its use of biometric scanning devices called “orbs,” which require users to have their eyes scanned for verification purposes.