Legal Battles on the Rise in the Crypto World

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Sead Fadilpašić

Journalist

Sead Fadilpašić

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Sead specializes in writing factual and informative articles to help the public navigate the ever-changing world of crypto. He has extensive experience in the blockchain industry, where he has served...

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June 26, 2023 06:53 EDT

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Over the past few days, at least several crypto related lawsuits broke the news. A class-action lawsuit against Ripple, a lost crypto battle in Norway and a new case in Israel, show that the industry is having an interesting time, to say the least.

Ripple, the creator and a developer of the Ripple payment protocol and exchange network, was hit by the lawsuit on Thursday in the Superior Court of California, alleging that it led a scheme to raise hundreds of millions of dollars through unregistered sales of its XRP tokens.

The lawsuit alleges that Ripple Labs Inc. created billions of coins “out of thin air” and then profited by selling them to the public in “what is essentially a never-ending initial coin offering,” according to Bloomberg. The filing adds that Ripple violated state and federal laws by offering unregistered securities to retail investors.

Continuing the lawsuit trend, Norwegian cryptocurrency exchange Bitmynt AS has lost its case against Scandinavian financial services giant Nordea, having sued the bank for closing the exchange’s account over concerns of inadequate anti-money laundering mechanisms and terrorist financing risks, E24.no reported. However, another lawsuit over a similar issue was also solved recently, this time as a victory for crypto. Chilean cryptocurrency exchange platform Buda has scored a victory in its legal battle with two local banks that had closed its account, thus preventing it from doing business in the country.

Meanwhile, this Sunday, similar news emerged from Israel. The Union Bank of Israel has been hit with a lawsuit by cryptocurrency mining company Israminers, which accused the bank of suddenly deciding to no longer allow the company to accept funds from crypto exchanges, and then sending back money already received in the account, according to the news.bitcoin.com. However, in another case in Israel in February, the Supreme Court of Israel issued a temporary injunction order forbidding a local bank from halting the account activity of the Bits of Gold bitcoin exchange.

The range of ongoing lawsuits is broader than “exchange vs. bank” battles. For example, Sequoia, an American venture capital firm, sued Zhao Changpeng (CZ), founder of the world’s largest cryptocurrency exchange Binance, over a funding deal gone awry. While a British TV Star intends to sue Facebook for defamation through crypto ads.