Binance continues to face ongoing legal battles, particularly in the United States. The exchange suffered a significant setback in June 2023 when it was hit with a lawsuit from the United States Securities and Exchange Commission (SEC), resulting in the termination of over 200 staff members and a decline in revenues, according to Christopher Blodgett, the company’s chief operating officer. Now, the SEC is alleging that Binance 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 heart of the SEC’s investigation is whether employees of Binance’s non-U.S. arm had access to customer assets held by Binance.US. The SEC has claimed that Binance.US has failed to prove that it did not have access to private keys or other means of accessing customer assets. Binance.US has disputed these allegations, stating that it has complied with the SEC’s extensive information requests and has asked the court to end the expedited discovery process.
In another development, a U.S. appeals court has overturned a ruling that dismissed a class-action lawsuit led by investors against Binance. Chase Williams filed the lawsuit in April 2020 on behalf of investors who argue 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, citing the investors’ claims as untimely based on the relevant statute of limitations. However, the appeals court has sided with the plaintiffs, affirming that Binance is subject to domestic securities laws and that the initial filing was timely.
In the ongoing saga involving Do Kwon, co-founder of Terraform Labs, 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 has ruled that the previous order to extradite Kwon was marred by significant violations of local criminal procedure laws. This decision marks another milestone in Kwon’s extradition process, which began when he was arrested in Montenegro in March 2023. Both the U.S. and South Korea have requested Kwon’s extradition, leading to a disagreement over which country he should be sent to.
In a positive development for the crypto industry, the Virginia Senate in the United States has passed a groundbreaking bill that establishes a workgroup dedicated to studying the overall cryptocurrency ecosystem and providing recommendations to support its growth. The workgroup will consist of 13 members, including legislators, representatives from the blockchain industry, and a government representative. The group has until November 1, 2024, to complete its studies and share recommendations with the General Assembly.
On the privacy front, the Spanish Agency for the Protection of Data (AEPD) has ordered Worldcoin to cease collecting and processing data in Spain. The AEPD has issued a temporary ban on Worldcoin’s operations for three months while it investigates complaints that users in Spain cannot withdraw their consent and that Worldcoin has collected data from minors. This comes shortly after Hong Kong’s Office of the Privacy Commissioner for Personal Data also investigated Worldcoin. The controversy surrounding Worldcoin revolves around its use of biometric scanning devices called “orbs,” which require users to have their eyes scanned for verification purposes.