Major cryptocurrency companies including Binance, Civic, Tron targeted in Flood of Lawsuits


A wave of class action lawsuits was unveiled in New York on Friday, targeting a number of major cryptocurrency projects.

First reported by Offshore Alert, at least 10 complaints were filed in the Southern District of New York on April 3, claiming that the companies had sold crypto tokens to US investors that were in fact unregistered securities.

Among those targeted in the suits are cryptocurrency exchanges Binance (see complaint) and operator BitMEX HDR Global Trading, as well as major blockchain projects such as Tron (see complaint), Civic, Block.One, Kyber Network, and Status. Bibox, Quantstamp, Bancor and Kucoin are also mentioned in the individual complaints.

The shares, which also appoint corporate executives, including Binance CEO Changpeng “CZ” Zhao and Civic’s Vinny Lingham, were promoted by “litigation boutique” Roche Cyrulnik Freedman on behalf of the plaintiffs. The law firm is currently representing Kleiman’s estate in a lawsuit against Craig Wright for a bitcoin hoard worth billions.

The complaint against Binance states:

“Binance and the Issuers have unfairly engaged in millions of transactions, including soliciting, offering and selling securities, without registering Tokens as securities and without Binance registering with the SEC as an exchange or broker-dealer. as a result, investors have not been made aware of the significant risks inherent in these investments, as required by federal and state securities laws. “

The lawsuits were filed on behalf of several individuals, including Chase Williams, Alexander Clifford and Eric Lee, as well as William Zhang in the Civic case. As collective actions, they are also promoted “on behalf of all others who are in a similar situation”.

In supporting their case, the plaintiffs are taking action by the US Securities and Exchange Commission against the maker of EOS Block, one on its more than $ 4 billion ICO in 2018.The company agreed to pay $ 24 million penalties for having conducted an unregistered sale of securities in September last year.

The plaintiffs compare the tokens issued by the companies accused in the complaints and the sale of Block.One’s EOS.

Binance’s filing states:

“The creation of the EOS tokens therefore took place through a centralized process, in contrast to Bitcoin and Ethereum. However, this would not have been apparent upon issuance to a reasonable investor. Rather, it was only after the passage of time and the disclosure of more information about the issuer’s intent, management process and success in enabling decentralization so that a reasonable buyer can know they have acquired a security. “

Other documents make similar claims of similarities between Block.One’s ICO and tokens issued by the defendants.

The reason why the lawsuits were filed en masse could be due to the statute of limitations in the United States, which states that a case for fraud must be initiated within two years of the discovery of a crime.

Fintech attorney Richard B. Levin told Decrypt the lawsuits are likely to go to trial.

“Filing a case is an extraordinary remedy,” Levin said. “I don’t think the court will dismiss the cases, and I also don’t think the courts will accept motions for summary judgment or on behalf of plaintiffs or defendants.”

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