U.S. Court Restarts HEX Manipulation Case Against Binance.US

A U.S. appeals court has partially overturned a previous decision to dismiss a class-action lawsuit against Binance.US, the American affiliate of leading cryptocurrency exchange Binance. The lawsuit alleges that Binance.US manipulated the price of the HEX token unlawfully.

Ryan Cox, the plaintiff, argues that Binance Capital Management and Binance.US deliberately lowered HEX’s ranking on CoinMarketCap, a crypto price-tracking website owned by Binance, which led to HEX trading at a lower price. Meanwhile, Binance’s own cryptocurrencies were allegedly ranked higher.

Appeals Court Overturns Dismissal 

Initially filed in 2021, the class-action suit was dismissed by a district court in February 2023. The court concluded that Cox failed to establish a direct connection between Binance.US’s activities and the state of Arizona, which was necessary to support the claims of price manipulation.

However, on August 12, a panel of three judges from the Ninth Circuit Court of Appeals disagreed with the lower court’s decision. The appeals court ruled that the district court does have personal jurisdiction over the U.S.-based defendants since they have significant ties to the United States as a whole.

The appeals court explained that the requirement of “sufficient minimum contacts” doesn’t need to be limited to Arizona. Since Binance.US and CoinMarketCap are either incorporated in or have their main offices in the U.S., they fall under the court’s jurisdiction. 

HEX Faces Increasing Legal Scrutiny 

The appeals court ruling allows the case to move forward in district court, where the claims of price manipulation will be further investigated.

This lawsuit adds to the legal challenges surrounding HEX, a token that was launched in December 2019 by Richard Heart. On July 31, 2023, the SEC filed a separate lawsuit against Heart, accusing him of violating federal securities laws and defrauding investors out of over $12.1 million, which he allegedly spent on luxury items.

The appeals court’s decision is a significant development in the ongoing legal issues involving HEX and its related entities, highlighting broader concerns in the cryptocurrency industry.