The filing against Binance claims that the cryptocurrency exchange sold securities without a license. Below is a quick summary of what we see as the four largest suits. The cases are seeking damages to be determined at trial. One of the key tenets of the test is that an investment contract exists when there is the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others. The lawsuits claim that tokens issued by the defendants fail the Howey Test, a check for determining whether an asset is a security under US federal law. Plaintiffs included Chase Williams, Alexander Clifford, William Zhang and Eric Lee. Also named in the suits were key company executives, including Block.one CEO Brendan Blumer and CTO Dan Larimer, Civic CEO Vinny Lingham, BitMEX founder Arthur Hayes, and Binance founder Changpeng Zhao, better known as "CZ." KuCoin, Quantstamp, Bibox, KayDex (Kyber Network), Status, BProtocol (Bancor Network), and Civic were among the several other companies targetted in the suits. We have not been served with any claims but are well prepared to address anything that may arise." Binance declined to comment. It wasn’t apparent to the investors that these tokens needed to be registered with the US Securities and Exchange Commission, the lawsuits said.Ī spokesperson for Block.One said, "We are aware of the opportunistic complaints filed against several blockchain and cryptocurrency companies. Some of the companies compared their tokens to Bitcoin and Ether (the native token of Ethereum), which are not considered securities. The suits assert that the companies pitched their tokens as so-called utility tokens, which they claimed did not need to be registered as securities. And they sold these alleged illegal securities to US citizens. The lawsuits, all filed in the US District Court for the Southern District of New York, have one theme in common: They all allege that the token issuers took advantage of the market’s lack of understanding and awareness of how cryptocurrencies worked. The firm also represents the Kleiman estate in its billion-dollar lawsuit against self-professed Bitcoin inventor Craig Wright. Roche Cyrulnik Freedman was notably the same law firm behind the Bitfinex market manipulation suit in October 2019. Offshore Alert called the event crypto’s own “Red Wedding,” in reference to a coordinated massacre that took place in the popular HBO series Game of Thrones. $0.0394499 2.39% Terra Classic (Wormhole)ĪD One of the lawsuits was served on Binance.
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