United States Court of Appeals For the Second Circuit

August Term 2022

Argued: April 12, 2023 Decided: March 8, 2024

No. 22-972

CHASE WILLIAMS, individually and on behalf of all others similarly situated, Plaintiff-Appellant,

JD ANDERSON, COREY HARDIN, ERIC LEE, individually and on behalf of all others similarly situated, BRETT MESSIEH, DAVID MUHAMMAD, RANJITH THIAGARAJAN, TOKEN FUND I LLC, Lead-Plaintiffs-Appellants,

v.

BINANCE, CHANGPENG ZHAO, Defendants-Appellees,

YI HE, ROGER WANG, Defendants.

Appeal from the United States District Court for the Southern District of New York No. 20-cv-2803, Andrew L. Carter, Judge. Before: LEVAL, CHIN, and NATHAN, Circuit Judges.

Plaintiffs-Appellants used Defendants-Appellees’ website, Binance.com, to purchase a type of crypto-asset called “tokens.” They allege that by selling these tokens without registration, Binance violated Section 12(a)(1) of the Securities Act of 1933, 15 U.S.C. § 77l(a)(1), and the “Blue Sky” securities laws of various states. Plaintiffs also seek recission of contracts they entered into with Binance under Section 29(b) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78cc(b). The district court dismissed Plaintiffs’ claims as impermissible extraterritorial applications of these statutes and also dismissed their federal claims as untimely. We conclude that Plaintiffs have adequately alleged that their transactions on the Binance exchange were domestic transactions and that therefore the application of federal and state securities laws here was not impermissibly extraterritorial. We further conclude that Plaintiffs’ federal claims did not accrue until after they made the relevant purchases, and therefore their claims arising from purchases made during the year before filing suit are timely. Accordingly, we REVERSE and REMAND as to the claims challenged on appeal. ________

JORDAN GOLDSTEIN (David Coon, on the brief), Selendy Gay Elsberg PLLC, New York, NY, for Plaintiffs-Appellants. JAMES P. ROUHANDEH (Daniel J. Schwartz, Marie Killmond, on the brief), Davis Polk & Wardwell LLP, New York, NY, for Defendants-Appellees. ________

NATHAN, Circuit Judge:

Plaintiffs-Appellants, purchasers of crypto-assets on an international electronic exchange called Binance, appeal the dismissal of this putative class action against Defendants-Appellees Binance and its chief executive officer

2 Changpeng Zhao. Plaintiffs seek damages arising from Binance’s alleged violation of Section 12(a)(1) of the Securities Act of 1933 (Securities Act), 15 U.S.C. § 77l(a)(1), which they claim occurred when Binance unlawfully promoted, offered, and sold billions of dollars’ worth of crypto-assets called “tokens,” which were not registered as securities. Plaintiffs also seek recission of contracts they entered into with Binance under Section 29(b) of the Securities and Exchange Act of 1934 (Exchange Act), 15 U.S.C. § 78cc(b), on the basis that Binance allegedly contracted to sell securities without being registered as a securities exchange or broker-dealer. Lastly, Plaintiffs