Binance and its founder Changpeng Zhao have lost a court appeal to dismiss a lawsuit alleging securities violations in the United States.

The US Supreme Court has rejected an appeal by Binance and former CEO Changpeng 'CZ' Zhao to dismiss a class-action lawsuit from investors alleging the company sold unregistered securities.

The complaint, filed by cryptocurrency traders, accuses Binance of inadequately disclosing the risks associated with tokens like Tron (TRX), EOS (Eos), among others. Recovering the money invested in these tokens is one of the primary goals outlined in the lawsuit.

Binance and its legal team have refuted these allegations, arguing that the exchange's operations fall outside the jurisdiction of US securities laws. Based on this argument, Binance initially sought to have the case dismissed by the US Court of Appeals for the Second Circuit.

However, the appeals court ruled that Binance was liable for the transactions, noting that investors purchased the tokens within the United States. The Supreme Court upheld this decision, according to a ruling dated January 13. a report.

This news could be another legal blow to the largest centralized cryptocurrency exchange, which has already faced court battles on US soil.

In November 2023, Binance agreed to a $4.3 billion settlement with the Department of Justice over federal anti-money laundering violations. CZ resigned as CEO and spent four months in prison as part of the deal.

The Justice Department case was not related to the investors' class action lawsuit. CZ company is also involved In a securities court case before the U.S. Securities and Exchange Commission.