Supreme Court Denies Binance’s Petition

On Monday, the U.S. Supreme Court denied Binance and its former CEO Changpeng Zhao’s petition to review a lower court ruling that U.S. securities laws apply to the cryptocurrency exchange, even without a physical headquarters.

Binance and Zhao’s legal issues have been ongoing since at least 2023, when the U.S. Securities and Exchange Commission alleged that the trading platform illegally serviced U.S. citizens. In late 2023, the crypto exchange paid $4.3 billion in penalties and forfeiture after felony guilty pleas. Binance is widely considered the world’s largest cryptocurrency exchange based on trading volumes.

This case revolves around whether Binance, lacking an official location and headquarters, is still subject to U.S. securities laws due to servicing American clients. Binance petitioned the Supreme Court to review the U.S. Court of Appeals for the Second Circuit’s decision that stated the exchange is subject to American securities laws regardless of not having offices in the U.S.

The Second Circuit determined that U.S. investors were located in America while purchasing tokens through Binance, and the transactions were conducted over U.S. servers, necessitating adherence to U.S. law.

Binance and Zhao (CZ) argue that this case has global implications and could impact the multi-trillion-dollar digital assets industry. They stated in their petition:
> “Recent innovations in technology have empowered investors to participate in foreign financial markets with greater ease and efficiency. Where such opportunities were once reserved for those able to travel abroad, work with international investment firms, or establish offshore entities, the internet has helped afford the same access to investors with fewer resources. With remarkable ease, an investor in Japan can now trade on exchanges in Europe with the click of a mouse. This interconnectivity and ease of access has increased not only the size of the market for trades but also the number of Americans who trade on foreign exchanges.”