Binance and Zhao's legal entanglements 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. Based on trading volumes, Binance is widely considered the world's largest cryptocurrency exchange.

This current case, in part, stems from whether Binance, which doesn't have an official location and headquarters, is subject to U.S. securities laws because it serviced American clients. Binance asked the Supreme Court to review the U.S. Court of Appeals for the Second Circuit's decision that the trading platform is subject to American securities laws regardless of whether or not it has offices in the United States.

The Second Circuit found that U.S. investors were not only in America when they bought tokens through Binance, but the transactions also occurred over U.S. servers, and therefore, the trading platform needs to adhere to U.S. law.

Binance and Zhoa (also known as CZ) contend that this case has global importance and could impact a multi-trillion-dollar digital assets industry.

"Recent innovations in technology have empowered investors to participate in foreign financial markets with greater ease and efficiency," it said in the petition. "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."

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

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