Kyle Roche, a partner at law firm Roche Cyrulnik Freedman recently opened up about 11 class-action lawsuits against top crypto companies. The firm, alongside Selendy & Gay, has filed lawsuits against cryptocurrency exchanges as well as ICO tokens. Defendants include Tron, Status, Bancor, and Block.One alongside their executives.
Bringing lawsuits against crypto head honchos
The 11 class action lawsuits follow the SEC’s guidance that ICOs are unregistered securities offerings in the US and all ICO issuers and exchanges must be registered with the SEC. The defendants in the case include Changpeng Zhao, Dan Larimer, Arthur Hayes, Brendan Blumer and Vinny Lingham amongst others.
In a recent interview, Kyle Roche talked about the lawsuits with Bitcoin.com and talked about crypto cases. The New York-based Roche Cyrulnik Freedman is involved in some high-profile crypto lawsuits including the Kleiman v. Wright case and a class-action lawsuit against Tether and Bitfinex. The first case is related to Craig Wright’s claims that he is the real Satoshi Nakamoto and the rightful owner of hundreds of thousands of Bitcoins worth over $1.5 billion. The second is against Bitfinex and its sister company Tether for violating Sherman Antitrust Act laws.
Why file 11 class-action lawsuits?
Roche talked about the class action lawsuits filed against crypto companies last week in the Southern District Court of New York. Four of the lawsuits are against crypto exchanges while seven are against issuers of tokens, like ICOs and IEOs. All lawsuits claim that executives and companies named as defendants in the case have committed “U.S. securities violations on a historic scale.”
He said that a lot of tokens were sold as utility tokens but it has become clear over time that they were securities. Roche added,
“There was a lot of confusion in the space and as time has elapsed, we’ve seen that these tokens are securities and they were created through a centralized process. Specifically, with the tokens that we have gone after that were created by the ERC20 protocol. The sale of those tokens here in the United States was the sale of unregistered securities.”
He reminded that the SEC brought a $24 million civil fine against EOS and Block.One for their ICO and highlighted that tokens were brought out by centralized entities, which qualifies them as securities. When asked about problems of jurisdiction, he noted that these investments are related to the US markets and involve US customers because of which the entities can be brought to court, regardless of where they are incorporated.