TLDR

  • US Court of Appeals partially reversed dismissal of class-action lawsuit against Binance.US

  • Lawsuit alleges Binance.US and CoinMarketCap manipulated HEX token price

  • Appeals court found plaintiff made justifiable claims against defendants

  • Court ruled it has personal jurisdiction over US-based defendants

  • 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, breathing new life into allegations of price manipulation for the HEX cryptocurrency token.

On August 12, 2024, a panel of three judges from the US Court of Appeals for the Ninth Circuit issued an opinion that overturned a district court’s previous dismissal of the case.

The lawsuit, initially filed in 2021 by plaintiff Ryan Cox, claims that Binance.US and CoinMarketCap unlawfully manipulated the price of the HEX token.

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

Cox’s lawsuit alleges that Binance Capital Management and Binance.US artificially restricted HEX’s ranking on CoinMarketCap, a cryptocurrency price-tracking platform owned by Binance. This manipulation, according to Cox, resulted in HEX trading at a lower price while Binance’s own cryptocurrencies were ranked higher.

The district court initially dismissed the lawsuit in February 2023, ruling that Cox had failed to establish sufficient links between specific activities in Arizona and Binance.US that would connect the exchange to the alleged manipulation of HEX.

However, the appeals court disagreed with this conclusion. The panel of judges found that the district court’s requirement for Cox to establish “sufficient minimum contacts” between Binance.US and Arizona was incorrect.

Instead, the appeals court determined that the district court has personal jurisdiction over the suit’s US-based defendants because they have sufficient contacts with the United States more broadly.

“Given that each company is incorporated or has a principal place of business in the United States, each has sufficient contacts with the United States to satisfy due process,” the opinion stated.

The appeals court also found that Cox’s suit made justifiable price manipulation claims against Binance.US. As a result, these claims have been remanded for ongoing legal proceedings.

This decision marks a significant development in the case, as it allows the lawsuit to proceed and potentially face trial. The concept of personal jurisdiction, which refers to a court’s authority to make formal judgments on the rights and liabilities of defendants, was a key factor in the appeals court’s decision.

HEX, the cryptocurrency at the center of this legal battle, was launched in December 2019 by its creator, Richard Heart. The token has faced significant challenges recently, with its value plummeting from its all-time high.

Currently, HEX is trading at $0.004, representing a decline of over 99% from its peak of $0.51 reached in September 2021.

Adding to the complications surrounding HEX, the US Securities and Exchange Commission (SEC) filed a lawsuit against Heart on July 31, 2023. The SEC accused Heart of violating federal securities laws and defrauding investors out of “at least” $12.1 million both in the US and overseas.

The regulatory body alleged that instead of using investor funds to develop or market the HEX token, Heart used the capital for personal luxury purchases, including a 555-carat diamond, expensive watches, and high-end automobiles.

https://t.co/mLZsmWIz4A #ROLEX Daytona rainbow and Submariner SABR. #HEXflexhttps://t.co/tyQE8i8y5h airdrop to all of #Ethereum soon! #HEXican #HEXflex

That rainbow Daytona alone is $1,000,000 after my diamond bracelet arrives. pic.twitter.com/BQ7dxHSE77

— Richard Heart (@RichardHeartWin) March 9, 2022

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