- Over 40 defendants from the crypto sector were recently hit with 11 class-action lawsuits.
- The lawsuit comes from the US-based law firm which represents crypto investors.
- The firm alleges that these businesses deceived investors into buying unregistered securities.
A US-based law firm called Roche Cyrulnik Freedman and Selendy & Gay PLLC recently filed 11 class action complaints. The firm targeted many members of the crypto sector. The company, which represents crypto investors, targeted 42 defendants in total. These include some of the largest crypto exchanges, as well as their founders and other officials.
The law firm is targeting the industry’s largest participants
The targeted businesses operate in many countries around the world. This includes the US itself, as well as Canada, China, Japan, Hong Kong Switzerland, Israel, and many others. As for the lawsuit itself, it claims that the defendants violated the US’ federal securities laws.
It claims that these businesses and their officials misled investors. Supposedly, they deceived them and led them into purchasing unregistered assets. Some of the targeted businesses include Binance itself, BitMEX, KuCoin, Status, Block.one and many others. As mentioned, the lawsuit also targets the executives of these businesses. This includes Binance’s Changpeng Zhao (CZ) and Block.one’s CTO, Dan Larimer.
One of the law firm’s partners, Philippe Selendy, commented on the new move. He said that “Not unlike the mortgage crisis that led to the Great Recession, the alleged pattern of misconduct by exchanges and issuers yielded billions in profits for wrongdoers through a basic betrayal of public trust.”
All coins coming through ICOs are securities, claims law firm
This is hardly the first time that crypto companies face such allegations. The US SEC itself is still targeting various ICOs from 2017 and following years, with a neverending supply of firms to sue. Many of these companies violated the security guidelines, knowingly or not.
Now, the new lawsuit mirrors those efforts. The lawsuit claims that all cryptos and tokens offered via ICOs should be considered securities. At least, that is the case according to the US regulations. That would include the coins by issuers such as TRON, Block.one, Binance, Bitmex, and many others.
Further, since they are issuing securities, these platforms need to follow the same guidelines as any traditional exchange. This would also include registering through the SEC as a specific type of business, disclosures, and more.
But, instead of doing that, the complaint says that these platforms started calling themselves exchanges. They assumed that this allows them to set up and follow their own rules regarding cryptocurrency listings. While the regulators did not react in time, the public assumed that these businesses are fully regulated. With no one telling them otherwise, they can get tricked into buying unregistered assets.