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D is an online platform where a variety of crypto-assets can be purchased and sold. D was founded in China and had launched its digital asset exchange, but it moved its titular headquarters first to Japan and then to Malta, seeking more favorable regulatory environments. D rejects having any physical headquarters in any geographic jurisdiction. D claims there is a new world with blockchain now and that Binance.com has always operated in a decentralized manner as we reach out to our users across more than 180 nations worldwide. D has a substantial presence in the United States, where it has servers, employees, and customers throughout the country. D never registered as a securities exchange or a broker-dealer of securities in the United States. Ps used D to purchase crypto-assets known as 'tokens' from seven categories: EOS, TRX, ELF, FUN, ICX, OMG, and QSP. Each named P purchased one or more of the Tokens on Binance, placing orders on the electronic platform from their state or territory of residence: Texas, Nevada, New York, Florida, California, and Puerto Rico. Ps allege that the Tokens are a type of crypto-asset called 'security tokens.' 'Security tokens' are tokens issued to raise capital for the issuer and provide the token holder with some form of future interest in the issuer's project to create the platform and software required for its use. That future interest could increase in value if the token's creators are successful in their endeavor. Security tokens do not give the token holder ownership or a creditor interest in any corporate entity. Security tokens are not designed to facilitate transactions or serve as a long-term store of value, but rather to raise capital for an enterprise without granting the holder ownership in any corporate entity. Unlike 'utility tokens,' security tokens do not grant the holder use and access to a particular service or product offered by the issuer. Security tokens are therefore distinct from other classes of crypto-assets that have some present tangible use beyond their potential to appreciate. The Tokens at issue here are 'ERC-20 tokens.' Between 2017 and 2018, many ERC-20 tokens were created and sold by third party issuers in initial coin offerings (ICOs), which collectively raised nearly $20 billion. Each ICO was accompanied by a 'whitepaper,' which included both advertising and a technical blueprint for the proposed project associated with the token. Ps allege that these whitepapers did not include the warnings that SEC registration statements would have included, and that registration statements for the Tokens were never filed with the SEC. After their ICOs, each of the Tokens was listed on D for secondary-market trading. Investors could buy the tokens through the D platform using other crypto-assets or traditional currencies. Ps purchased Tokens on D pursuant to its Terms of Use, and paid D fees for the use of its exchange. Ps allege that all of their activities to transact on D were undertaken from each of their U.S. state or territory of residence. Ps allege that their trade orders were matched on, and their account data was stored on, servers hosting D's platform, the vast majority of which were located in the United States. Ps allege that D directly targeted the U.S. market with advertising and customer support specifically aimed at U.S. users. When D cut off access to its platform for U.S. it simultaneously advised U.S.-based purchasers how to circumvent its own restrictions using virtual private networks (VPNs), after which several Ps continued trading on D from the United States. Ps allege that 'the vast majority' of Tokens they purchased on D 'turned out to be empty promises,' and 'all of the Tokens are now trading at a tiny fraction of their 2017-2018 highs,' and 'investors were left holding the bag when these tokens crashed.' Ps sued seeking rescission or damages, interest, and attorney's fees. The 327-page complaint asserts 154 causes of action under the Securities Act, the Exchange Act, and the Blue Sky statutes of 49 different states, the District of Columbia, and Puerto Rico. Ds moved to dismiss or to compel arbitration. The district court granted the motion to dismiss. The court held that the claims were impermissibly extraterritorial or untimely. Ps appealed.

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