There are 11 class action Lawsuits have brought in to light in the New York federal court against seven crypto-focused firms on April 3rd.
The filing first reported by the USA-based website OffShoreAlert– a news portal on financial intelligence and regulatory actions.
The lawsuits have filed by the same law firm- Roche Freedman— representing plaintiffs litigation against the Craig Steven Wright (self-proclaimed Satoshi Nakamoto) and Bitfinex.
The plaintiffs include Chase Williams, Alexander Clifford, and Eric Lee.
11 Class Action Law Suits Against Notable Names & Reason
In the Southern District New York, the law firm has filed the eleven new “putative class actions” court case against many companies, including the recognized cryptocurrency exchanges and crypto issuers.
The alleged names of the company’s principals are Brendan Blumer, Dan Larimer, Vinny Lingham, and the famous figure of the cryptocurrency exchange- Changpeng (“CZ”) Zhao, Binance’s founder.
Here is the list of crypto assets which have considered as securities- OmiseGO (OMG), Bancor (BNT), Status (SNT), Kyber Network (KNC), Eos (EOS), Quantstamp (QSP), Bibox Token (BIX), Civic (CVC), Funfair (FUN), Aelf (ELF), TomoChain (TOMO), Icon (ICX), ETHLend (LEND), and Tron (TRX).
Reportedly, the accused cryptocurrency exchanges and token issuers are involved in the sale of unregistered cryptocurrencies. They have considered as defaulters on the abandonment of Securities law.
The claim is crypto firms have sold the “unregistered and unlicensed securities without broker-dealer licensing and engaged in market manipulation activities.”
OffShoreAlert has described the court case as a “Red Wedding” event because the accused companies and the major crypto bulls of the industry have hit by the litigations put by the law firm.
Red wedding is a reference denoting the bloody nuptials featured in “George R. R. Martin’s A Song of Ice and Fire series.”
The accused companies have violated the U.S. federal and state securities laws and have sold the digital tokens to persons based in the United States. The lawsuit claims have followed a “control person liability theory” against the alleged personalities. This theory imposes personal liability for corporate securities law claims.
As per the information, the “control person liability theory” route usually takes place against the officers and directors of the organization on the hypothesis that they have control of the entity responsible for the first violation.
Covid-19 May Delay the Process
The Covid-19 pandemic might hamper the proceedings of the litigation from the judicial side.
Reportedly, it has indicated that service-of-process and issuance-of-summons would possibly get delayed.
The Southern District of New York would treat the U.S. defendants, and the non-U.S defendants have to face legal actions via the Hague Convention as they have based outside the U.S. province. However, the discussions and claims are tending to be the same against the parties/cryptocurrency exchanges/token issuers.