Coinspeaker
US Court of Appeals Revives HEX Manipulation Case against Binance.US
The legal battle involving Binance.US and Ryan Cox over alleged market manipulation of the HEX token has taken a new turn. According to a recent report, the US Court of Appeals for the Ninth Circuit has revived the case, which accuses Binance.US and its parent company, Binance Capital Management, of manipulating the price and ranking of HEX on CoinMarketCap.
Background of the Case
The case was originally brought forward by Cox in 2021. He alleged that Binance.US and the global exchange deliberately suppressed the ranking of the HEX token on CoinMarketCap, resulting in a lower market value for HEX.
According to Cox, this manipulation benefited Binance’s own cryptocurrencies, which were ranked more favorably on the platform. He argued that this unfair treatment of HEX directly impacted investors, leading to significant financial losses.
The case lingered until February 2023, when a district court dismissed the lawsuit. At the time, the court ruled that Cox had not established a direct connection between Binance.US’s actions and specific activities in Arizona, where the lawsuit was filed. Without sufficient evidence of Binance.US’s involvement in activities within Arizona, the court determined there was no basis to assert personal jurisdiction over the company.
Appeals Court Reverses the Decision
However, things changed on August 12, 2024, when the US Court of Appeals for the Ninth Circuit overturned the district court’s dismissal. This decision was reached by a panel of three judges who found that the lower court had erred in requiring Cox to establish “sufficient minimum contacts” between Binance.US and Arizona.
Instead, the appeals court determined that the district court has personal jurisdiction over Binance.US because the company, along with CoinMarketCap, has significant operations within the United States as a whole.
The appellate court emphasized that both Binance.US and CoinMarketCap have substantial business ties across the US, making them subject to the court’s jurisdiction. The ruling allows Cox’s lawsuit to proceed, breathing new life into his claims of market manipulation against Binance.US.
With the lawsuit against Binance.US now back on the table, the legal proceedings will continue in the district court.
As the case develops, it will be closely monitored by industry participants, regulators, and the broader crypto community. The outcome could set a precedent for future litigation involving exchanges and market manipulation claims.
For Binance.US, the revival of this lawsuit adds to the growing list of regulatory and legal challenges the company faces in the United States.
The Troubled History of the HEX Token
Despite the revival of the case, the HEX token itself has been fraught with issues.
Launched in December 2019 by Richard Heart, the digital asset has been mired in controversy. Once valued as high as $0.51 in September 2021, HEX has since seen its price plummet to around $0.004, a decline of over 99% from its peak.
The token’s troubles were compounded in July 2023, when the US Securities and Exchange Commission (SEC) sued Heart for allegedly violating federal securities laws and defrauding investors out of at least $12.1 million. The SEC accused Heart of misusing investor funds for personal luxury purchases, rather than for the development or promotion of the HEX token.
US Court of Appeals Revives HEX Manipulation Case against Binance.US
