Second Circuit Rules U.S. Securities Laws Reach Certain Digital Asset Transactions

In Short

The Situation: The Second Circuit recently revived a securities class action against the crypto exchange Binance Holdings Ltd., holding that plaintiffs plausibly alleged their transactions on the exchange were "domestic," as required by the U.S. Supreme Court's decision in Morrison v. National Australia Bank Ltd.

The Holding: The court held that plaintiffs plausibly alleged they became irrevocably liable in the United States—making the transactions domestic—for two reasons: (i) the transactions were allegedly "matched" on Amazon Web Services ("AWS") servers located in the United States; and (ii) plaintiffs allegedly placed trade orders and sent payments from the United States.