Seven cryptocurrency issuers and four exchanges face class-action lawsuits from investors claiming that they violated U.S. securities laws by selling billions of dollars in unregistered assets. Some of the defendants include cryptocurrency issuers Block.one and Tron, and exchanges Binance and BitMEX. The 11 lawsuits were filed in the U.S. District Court in Manhattan on April 3. The suits were brought by different plaintiffs, but the same attorneys.
The issuers and exchanges are accused of selling digital assets without registering them with federal or state regulators. The plaintiffs claim that the exchanges profited from listing the unregistered assets. The complaint against Binance says, “In addition to receiving fees for each transaction performed on its exchange, [the exchange] received large cash payments from Issuers seeking to get their tokens listed.” The cash fees for Binance’s token-listing allegedly exceeded $1 million in some cases.
Investors accuse BitMEX of not only selling unregistered securities but also manipulating the cryptocurrency market for its own benefit. According to the complaint, “In allowing customers to leverage at the extraordinary ratio of 100:1— about twenty times higher than the common ratio in trading—BitMEX positioned itself to benefit consistently, significantly, and predictably from the combination of attracting overly hopeful investors and small price fluctuations on other exchanges.”
Philippe Selendy, of law firm Selendy & Gay, is one of the lead attorneys for the plaintiffs. He previously worked as a lead attorney for the U.S. government and filed suits against banks over mortgage-backed securities. He said in a statement on Monday that “the alleged pattern of misconduct by exchanges and issuers yielded billions in profits for wrongdoers through a basic betrayal of public trust.”