Eleven class action lawsuits are filed against the major crypto exchanges, including Binance and BitMEX, at a federal court in Manhattan. The class-action lawsuit names executives like Block.one CTO, Dan Larimer, and Binance CEO, Changpeng Zhao.
07 April, 2020 | AtoZ Markets – US law firm, Roche Cyrulnik Freedman and Selendy & Gay PLLC, recently filed 11 class-action lawsuits. The firm has targeted many members of the crypto industry. The company, which represents crypto investors, has targeted a total of 42 defendants. Lawsuits filed against some of the biggest crypto exchanges, including Binance and BitMEX, as well as their founders and other officials.
Targeted companies operate in many countries around the world. This includes the United States itself, as well as Canada, China, Japan, Hong Kong, Switzerland, Israel and many others. The lawsuits also alleged that the defendants violated federal securities laws and misled investors by inducing them to buy unregistered assets.
Lawsuits Hit the Several Largest Crypto Exchanges
Defendants include crypto issuers and exchanges, including KuCoin, BitMEX, Bprotocol, Status, Block.one, Civic and Binance. The class action names executives such as Block.one CTO Dan Larimer and Binance CEO Changpeng Zhao. Philippe Selendy, partner at the firm Selendy & Gay, said in a statement:
"The alleged wrongdoing by exchanges and issuers has brought billions of dollars in profits to criminals, betraying public trust".
It is not the first time that crypto companies have faced such allegations. The US SEC itself continues to target various ICOs starting in 2017. Many of these companies have knowingly or not violated security guidelines.
The case reflects the SEC's insistence that crypto financial products comply with traditional security rules. It is the part of a larger regulatory and legal crackdown in the growing cryptocurrency industry.
According to the allegation, US regulations also assume that the cryptocurrencies and tokens offered by the ICOs are securities. However, the complainants argue that defendants have violated US laws.
As securities, cryptocurrency platforms should follow the same rules as each exchange, including disclosure and registration with the SEC as a national exchange, alternative trading system or broker.
Instead, the complaint says that these platforms have started to call themselves exchanges. They also assume that this allows them to set up and follow their own rules for regarding cryptocurrencies listings. If the regulatory authorities did not react in time, the public assumed that these businesses fully regulated.
The regulatory status of cryptocurrency offerings in general remains somewhat obscure. However, the SEC has warned that securities law may apply to certain virtual tokens based on their specific characteristics.
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