A three-judge panel has partially overturned a class-action lawsuit accusing Binance.US and CoinMarketCap of manipulating the price of HEX.
The United States appeals court has partially overturned the dismissal of a proposed class-action lawsuit against Binance.US, the American subsidiary of leading crypto exchange Binance. The lawsuit alleged that the trading platform unlawfully manipulated the price of Hex, the native token of the HEX project.
A three-judge panel from the Ninth Circuit Court of Appeals reversed a district court’s earlier decision to dismiss the class action lawsuit, ruling that the plaintiff, Ryan Cox, had presented valid claims against Binance.US and CoinMarketCap, a crypto tracking platform owned by Binance.
Cox Files Lawsuit Against Binance.US
Cox filed the class-action lawsuit in 2021, accusing Binance Capital Management and Binance.US of artificially restricting the HEX token’s ranking on CoinMarketCap.
A district court judge initially dismissed the lawsuit in February 2023, concluding that Cox had not established a direct connection between activities in Arizona and Binance.US, which would link the exchange to the alleged manipulation of HEX.
On August 12, the judges disagreed with the district court’s initial ruling that required Cox to prove “sufficient minimum contacts” between Binance.US and Arizona, the state where Cox first filed the lawsuit, for the court to set up personal jurisdiction.
The panel determined that the district court possesses personal jurisdiction over the U.S.-based defendants in the lawsuit because they have sufficient connections with the U.S.
Personal jurisdiction refers to a court’s power to issue judgments on the rights and liability of the defendants, such as Binance.US and CoinMarketCap, in this instance.
Appeals Court Finds Cox’s Claims Valid
Additionally, the appeals court found Cox’s allegations of price manipulation against the exchange legitimate. The case has been remanded for further legal proceedings.
HEX was launched by Richard Heart in December 2019. On July 31, 2023, the United States Securities and Exchange Commission (SEC) filed a lawsuit against Heart for violating federal securities laws and defrauding investors of at least $12.1 million.
The SEC claimed that Heart misused investor funds for personal luxury items, such as a “555-carat diamond, costly watches, and high-end automobiles.”
Meanwhile, the HEX token is currently trading at $0.001139, down over 99% from its all-time high of $0.51, recorded in September 2021, according to data from crypto tracker CoinGecko.