The appeal filed by exchange giant Binance has been rejected by the U.S Supreme Court, arguing that it is not bound by U.S securities laws due to the absence of a physical headquarters within the country.
This denial dealt a significant blow to Binance Coin (BNB), which dropped to a multi-week low of $660 before recovering to trade at $687 presently.
Case Breakdown
This petition originated from a class action lawsuit filed against Binance in 2020. Investors alleged that the exchange offered securities without holding registration as a brokerage platform under U.S laws.
Binance refuted these allegations, claiming non-U.S status and exemption from U.S regulations. The lawsuit was initially dismissed in March 2022 by U.S District Judge Andrew Carter.
However, the suit was revived last March by the Manhattan Appeals Court, asserting that despite lacking U.S headquarters, Binance falls under securities laws as U.S investors accessed tokens through U.S servers.
Binance Pursues Appeal
In December 2024, Binance sought an appeal before the U.S Supreme Court, contending that advancements in technology facilitated investor access to foreign financial markets more efficiently.
“While these opportunities were once limited to those able to travel abroad or work with international investment firms, the internet has leveled the playing field for investors with fewer resources.”
Nevertheless, the U.S Supreme Court dismissed this appeal, affirming the Manhattan Court’s ruling that U.S laws apply to Binance. Consequently, the case will progress further.
Impact on BNB
The rejected appeal led to fluctuations in BNB’s price. Data from Coinglass disclosed liquidated $2M worth of BNB open positions within 24 hours, with $1.94M from long positions.
Long traders selling BNB to close positions prompted a downward price trend. Additionally, a decline in funding rates deterred traders from maintaining positions.
Currently, BNB funding rates have turned negative, indicating short traders paying funding fees to uphold positions.
BNB Recovery Prospects
Presently, BNB faces significant selling pressure. For instance, the Chaikin Money Flow (CMF) indicator entered the negative zone for the first time in over three weeks.
Moreover, the Average Directional Index (ADX) hinted at an intensifying downtrend.
Despite the selling pressure, Binance Coin remains within a symmetrical triangle pattern. A bullish breakout from this pattern, surpassing resistance at the 0.5 Fibonacci level (706), may negate bearish trends. Conversely, breaching the lower trendline could induce a drop towards $510.
A potential factor supporting a bull run is the forthcoming leadership transition at the U.S. Securities and Exchange Commission (SEC) following Gary Gensler’s resignation as the SEC Chair, which could favor tokens previously scrutinized by the commission.