Crypto Class Action Lawsuits Filed in New York Federal Court

Cases filed in on Friday, April 3
Allegations include a range of illegal activities
42 defendants are involved
Crytpo and Bitcoin Market Cap Story of Day

Crytpo and Bitcoin Market Cap Story of Day

CRYPTO MOVERS AND PRICES

 

 

CRYPTO STORY OF THE DAY

Eleven Coordinated Class Action Lawsuits Have Been filed In New York against Prominent Crypto Firms. Several Executives Alleging A Range Of Illegal Activities, Including Securities Laws Violations Against Exchanges And Issuers - The Lawsuits Have Been Filed By the Roche Freedman Law Firm Which Represents Plaintiffs In Ongoing Cases Against nChain chief scientist, Craig Wright, and Tether/ Bitfinex.  

  • The cases, filed on Friday, include Binance, BitMEX operating firm HDR Global Trading, Block.one and KuCoin. Several of the firms’ principles, including BitMEX CEO Arthur Hayes and Binance CEO Changpeng Zhao, have also been named. In all, 42 defendants across several jurisdictions are involved. The plaintiffs are not involved in previous cases associated with their attorneys.
  • The allegations are far-ranging and include accusations that BitMEX manipulated futures prices on its platform or that it would ‘freeze’ its servers to prevent trading and profit during volatility. Binance, for example, is accused of failing to register to sell securities when it sold coins that include EOS. Court documents name three plaintiffs, ‘individually and on behalf of all others similarly situated. 

Takeaway: In October, we referred to a suit brought by the same law firm against Bitfinex and Tether, which sought USD 1.4T in damages, as ridiculous. We largely see these cases as similarly ill-intentioned attempts to take advantage of the US legal system in order to extort settlements rather than to seek justice. The formula for Roche Freedman seems to be: take an unsubstantiated rumour in the space, add additional obfuscation and crypto-jargon and hope that a lack of expertise within the judiciary leads to a payout. For example, allegations against BitMEX regarding market manipulation have been circulating within the space for years. In most instances, the lawsuits do not attempt to explain why companies would risk profitable businesses to execute illegal schemes that would bring in a fraction of the funds the exchange makes otherwise. Nevertheless, the lawsuits highlight some of the space’s legal uncertainties. This is awkward for an industry seeking to portray maturity and security in order to invite new entrants. Each of these crypto businesses’ cases will generate headlines over time that will invite negatively colored attention. Civil litigation is a long and drawn-out process. Outcomes may differ based on strategies opted by defendants but it is likely that conclusions are several years away.

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