Since the beginning of blockchain and cryptocurrency, it was apparent that there would be emerging legal issues unique to them, while other legal issues would be applied in the same way as they have always been applied, but simply to a new technology.  The case discussed in this post looks at the issue of personal jurisdiction through that prism.

HEX is a cryptocurrency marketed as the first blockchain certificate of deposit.  Defendant CoinMarketCap is a coin ranking website owned by Defendant Binance Capital Mgmt. Co., Ltd. (“BCM”)—a cryptocurrency exchange.  Cox v CoinMarketCap et al is a case in which plaintiff Ryan Cox brought suit in federal court in Arizona, alleging wrongdoing on the part of the Defendants based on CoinMarketCap’s supposedly suppressing HEX’s ranking from number 20 to 201.  Cox further alleged that BCM overvalued the cryptocurrencies it issued and owned —  BinanceCoin and BinanceUSD.  Ultimately, Plaintiff alleged that: (1) Defendant CoinMarketCap’s failure to properly rank HEX artificially suppressed its value to Cox’s detriment; (2) if HEX had been ranked higher, consumers would have purchased HEX over other cryptocurrencies, including Binances’ cryptocurrencies; (3) this artificial suppression provided a financial benefit to all named Defendants; and (4) the erroneous ratings have improperly inflated the value of cryptocurrencies ranked above HEX, including Binances’ cryptocurrencies.

Defendant Binance US was alleged to be the U.S. affiliate of BCM and affiliated with CoinMarketCap.  Defendants move to dismiss the Complaint for lack of personal jurisdiction, and failure to state a claim.  Because the court dismissed on jurisdictional grounds, it did not have to consider the latter grounds.

There was no general jurisdiction over Binance US because it was not incorporated in Arizona, nor did it have its principal place of business there.

With respect to specific jurisdiction, under prong one of the Court’s analysis, it was necessary for  Plaintiff to show that (1) Binance.US committed an intentional act that was (2) expressly aimed at Arizona, and that (3) the act caused harm that Defendant knew would likely be suffered in Arizona.  The Court found that Binance.US committed an intentional act by operating in the United States and allowing CoinMarketCap’s rankings on its website.  But there were no facts to suggest Arizona was being specifically targeted.  And, the Court held, Plaintiff failed to allege that Binance.US knowingly caused Plaintiff harm in Arizona because unspecified potential investors throughout the United States potentially relying on recommendation of CoinMarketCap’s rankings would not lead Biance.US to foresee Plaintiff’s alleged harm in Arizona.

Under the second prong of the Court’s specific jurisdiction analysis, Plaintiff had to  demonstrate that, but for Binance.US’s activity in Arizona, Plaintiff’s injuries would not have occurred.  Furthermore, a plaintiff’s claims have to arise from “contacts that the ‘defendant himself’ creates with the forum State.”  Plaintiff alleged that, because Binance.US’s website directed unidentified potential investors to’s rankings, those potential investors did not purchase HEX because its rankings were artificially deflated, thus harming Plaintiff and his investment interest in HEX.   The Court held that Plaintiff’s connection was far too attenuated to demonstrate that “but for” Binance.US’s website being available in Arizona, Plaintiff’s allegations as to HEX’s artificial deflation would not have arisen.

With respect to specific jurisdiction over CoinMarketCap, Plaintiff relied on the accessibility of its website in Arizona.  The Court disagreed that this was a proper basis for jurisdiction because Plaintiff failed to allege that any part of CoinMarketCap’s website specifically targeted Plaintiff or Arizona residents, a requirement of Ninth Circuit law.  As to the “but for” second prong, the Court found that Plaintiff failed to demonstrate that his claim arose out of CoinMarketCap’s activities in Arizona. Plaintiff’s “challenged conduct” of CoinMarketCap had nothing to do with Arizona.

In sum, the lawsuit was dismissed with prejudice for lack of personal jurisdiction using well-established principles that apply in the non-crypto space as well.


David Zaslowsky has a degree in computer science and, before going to Yale Law School, was a computer programmer. His practice focuses on international litigation and arbitration. He has been involved in cases in trial and appellate courts across the United States and before arbitral institutions around the world. Many of David’s cases, including some patent cases, have related to technology. David has been included in Chambers for his expertise in international arbitration. He is the editor of the firm's blockchain blog.