Top 11 Crypto Companies Face NY Class Action Lawsuit for ‘Unlawful Selling Of Securities’
In what is described as crypto’s own “Red Wedding” on April 3rd, a Manhattan federal court received eleven class lawsuits targeting seven top crypto companies and over 42 defendants across 16 countries across the globe. The plaintiffs, Roche Freedman –who also advocated against Craig Wright’s Satoshi Nakamoto bid and Bitfinex-Tether scandal – claim the defendants' issue and sell cryptocurrencies which are claimed to be unregistered securities.
However, as is the case with most of the class action suits, the process is expected to be painfully slow, compounded with the current slowdowns due to the CoronaVirus effects.
Over 11 class lawsuits implicate Binance, Block. one, BitMEX and others
In what is named after the epic scene from HBO’s TV series, Game of Thrones, “The Red Wedding”, several crypto companies face possible federal crimes in offering unregistered securities. Roche Freedman filed even separate class lawsuits to the federal courts in Southern District of New York implicating several exchanges and crypto companies including Binance, Civic, BProtocol, Status, Block.one, KayDex, Quantstamp, BiBox, TRON Foundation, KuCoin, HDR Global Trading (parent of BitMEX exchange).
OffShore, a lawsuit filing platform reported the case further showing 42 respondents were also individually mentioned in allowing unregistered securities including Block.one CEO Brendan Blumer and CTO Dan Larimer, Civic CEO Vinny Lingham, BitMEX founder Arthur Hayes, and Binance founder Changpeng “CZ” Zhao.
The lawsuit insider
According to the lawsuit, the defendants offered tokens failing to pass the Howey Test, which determines if an asset is a security under U.S Federal law. Furthermore, the lawsuit claims the exchanges lack broker licensing and may have been part of market manipulation crimes too.
With one state court has ruled against Telegram issuance of its GRAM tokens, the case may prove to be a big hole in the crypto market. However, there remains hope that the process may end up being settled with the Securities Exchange Commission (SEC) given the long and tedious process of a class-action lawsuit.