7 Crypto Firms Targeted by 11 Lawsuits in New York

NEWS

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Seven crypto companies have been targeted by 11 lawsuits that were filed in a New York federal court on April 3.

The suits were filed by Roche Freedman — the same law firm representing the estate of the late Dave Kleiman in the ongoing dispute with self-proclaimed Satoshi Nakamoto, Craig Wright.

Eleven lawsuits target seven crypto companies

The eleven putative class action suits name dozens of parties including cryptocurrency exchanges Binance, KuCoin, BiBox, and BitMEX and parent company HDR Global Trading Limited, and alleged crypto issuers Block.one, Quantstamp, KayDex, Civic, BProtocol, Status, and the Tron Foundation.

Many of the company’s principals are named, including several leading figures in the crypto sector such as Changpeng Zhao, Dan Larimer, Vinny Lingham, and Brendan Blumer.

Crypto firms accused of wholesale securities violations

The lawsuit alleges that numerous exchanges have sold unlicensed securities without broker-dealer licensing and engaged in market manipulation.

The plaintiffs also argue that many token issuers selectively withheld information from investors to ensure that it would not be apparent the tokens comprised securities until well after the token sale.

Bibox Token (BIX), Eos (EOS), Bancor (BNT), Status (SNT), Quantstamp (QSP), Kyber Network (KNC), Tron (TRX), Funfair (FUN), Icon (ICX), OmiseGO (OMG), ETHLend (LEND), Aelf (ELF), TomoChain (TOMO) and Civic (CVC) are among the crypto assets that the plaintiffs argue comprise securities.

Proceedings expected to move slowly

Several non-US defendants will need to be served via the Hague Convention due to their location outside of the United States. Disruptions to the judicial system resulting from the COVID-19 panic will also have an impact.

The case is likely to invoke familiar discussions surrounding the jurisdiction of the court in ruling against parties based outside of the U.S., discourse concerning the efforts of exchanges and token issuers to exclude U.S. residents from their platforms and offerings, and whether the crypto assets in question comprise securities.

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By Samuel Haig

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