Class Action Lawsuits Lodged against Binance, BitMex, Tron and More (UPDATED)
An American law firm has filed a series of ambitious class action lawsuits against some of the biggest crypto exchanges and token issuers in the world, accusing them of selling unlicensed securities without brokerage or dealer licensing certification and market manipulation. (Updated at 17:36 UTC: updates in bold).
In a press release, legal firm Roche Freedman named crypto heavyweights such as Binance, KuCoin and BitMEX, as well as its operator HDR Global Trading. It also named exchange BiBox and the Tron Foundation, in addition to Block.one, Quantstamp, KayDex, Civic, BProtocol and Status.
Binance CEO Changpeng Zhao, EOS and Block.one’s Dan Larimer and Brendan Blumer and Civic CEO Vinny Lingham are named in the legal firm’s documentation.
The lawyers singled out BitMEX in particular, claiming that the exchange was guilty of “manipulating prices to force investors to liquidate their portfolios.”
The law firm has plenty of previous experience in the world of cryptocurrency litigation – as it is also currently representing the estate of Dave Kleiman, the now-deceased business partner of the man who claims he founded Bitcoin (BTC), Craig Wright.
The firm also stated that the suits contained evidence of “misconduct by exchanges and issuers” that “yielded billions in profits for wrongdoers through a basic betrayal of public trust.”
One of the partners stated,
“The lawsuits we filed seek to restore integrity and transparency to these new financial markets.”
“The class action lawsuits will play out in one of two ways: One way is that since the cases will be determined by US courts, it will force precedence on what constitutes as a securities offering, who is responsible for it, and under what jurisdiction,” Alexander S. Blum, COO of Two Prime, a fintech company focused on the financial applications of crypto, said in an emailed statement.
However, some companies may want to settle out of court and there may not be any legal decision, he added, noting that it’ll be interesting to see whether the US courts will be able to enforce their decisions on international groups with no legal entities in the US, such as Tron or KuCoin.
Also, it remains to be seen if and when the defendants will appear in court to face the firm’s charges, with travel restrictions and coronavirus pandemic-related lockdowns in place in most parts of the world.