TLDR
- U.S. appeals court partially reverses dismissal of lawsuit against Binance.US over HEX token manipulation
- Plaintiff Ryan Cox claims Binance.US and CoinMarketCap artificially restricted HEX’s ranking
- Appeals court finds district court has personal jurisdiction over U.S.-based defendants
- HEX token creator Richard Heart sued by SEC for alleged securities law violations
- HEX token currently trading at $0.004, down 99% from all-time high
A United States appeals court has partially reversed the dismissal of a class-action lawsuit against Binance.US, reopening a case that alleges the cryptocurrency exchange manipulated the price of the HEX token.
The decision, made by a panel of three judges in the U.S. Court of Appeals for the Ninth Circuit, marks a significant development in the ongoing legal battle.
The lawsuit, originally filed in 2021 by plaintiff Ryan Cox, claims that Binance Capital Management and Binance.US artificially restricted the ranking of the HEX token on CoinMarketCap, a cryptocurrency price-tracking website owned by Binance.
Cox argues this manipulation resulted in HEX trading at a lower price while Binance’s own cryptocurrencies were ranked higher.
Initially, a district court judge dismissed the lawsuit in February 2023. The judge ruled that Cox had failed to establish concrete links between specific activities in Arizona, where the lawsuit was filed, and Binance.US’s alleged manipulation of HEX.
U.S. court reopens HEX manipulation case against https://t.co/ryPvR1aYUC
A 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
However, the appeals court disagreed with this conclusion. In an August 12 opinion, the judges stated that Cox didn’t need to prove “sufficient minimum contacts” between Binance.US and Arizona specifically.
Instead, they ruled that the district court has personal jurisdiction over the U.S.-based defendants because they have sufficient contacts with the United States more broadly.
The appeals court noted that since each company is incorporated or has a principal place of business in the United States, they have enough contact with the country to satisfy due process requirements. This decision allows the lawsuit to proceed against the U.S.-based defendants.
Additionally, the appeals court found that Cox’s suit made justifiable price manipulation claims against Binance.US. These claims have been remanded for ongoing legal proceedings.
The HEX token, launched in December 2019 by Richard Heart, has faced its own legal troubles. On July 31, 2023, the U.S. Securities and Exchange Commission (SEC) sued Heart for allegedly violating federal securities laws and defrauding investors of at least $12.1 million both in the U.S. and overseas.
According to the SEC’s lawsuit, Heart allegedly used investor funds for personal luxury purchases instead of developing or marketing the HEX token. These purchases reportedly included a 555-carat diamond, expensive watches, and high-end cars.
The value of the HEX token has significantly decreased since its peak. Currently trading at $0.004, it has fallen over 99% from its all-time high of $0.51, which it reached in September 2021.
As the legal proceedings continue, the cryptocurrency community will be watching closely to see how this case unfolds and what implications it may have for other exchanges and tokens in the future.
