11 Lawsuits in New York Directed Against 7 Crypto Firms

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

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

Eleven lawsuits concerning seven crypto companies

The eleven putative class action lawsuits list numerous parties such as 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 influential figures in the crypto space such as Changpeng Zhao, Dan Larimer, Vinny Lingham, and Brendan Blumer.

Crypto firms accused of wholesale securities violations

The lawsuit states that various exchanges have sold unregistered securities without broker-dealer licensing and took part in market manipulation.

The plaintiffs also claim that many token issuers selectively withheld information from investors to ensure that it would not be visible 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 named as the crypto assets that the plaintiffs claim comprise securities.

Proceedings expected to be slow

Several non-US defendants will need to be served via the Hague Convention since they are located outside of the United States. Disruptions to the judicial system caused by the coronavirus pandemic will also impact the process.

The case is likely to rise familiar discussions concerning the jurisdiction of the court in ruling against parties operating from 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 considered can be classified as securities.