Crypto Currency Business Class Actions Stopped By Statute of

Crypto Currency Business Class Actions Stopped By Statute of Limitations


Friday, May 7, 2021
Five plaintiffs recently voluntarily dismissed their putative securities class action lawsuits one year after sending shock waves through the crypto world when they filed eleven alleged class action lawsuits against cryptocurrency exchanges and issuers.  The five dismissals come shortly after recent rulings in two of the eleven lawsuits dismissing plaintiffs’ claims for failure to bring the claims within the one-year statute of limitations.
Last April, law firms Roche Freedman LLP and Selendy & Gay PLLC filed eleven class actions in the Southern District of New York.  As with SEC regulatory actions against the virtual currency industry, the private litigants’ core allegation was that the companies violated §§ 5 and 12(a)(1) of the Securities Act of 1933 by engaging in the unregistered sales of securities when launching their initial coin offerings (ICOs), and, as to the exchanges, conducted millions of transactions without registering with the SEC as an exchange or broker-dealer.  Plaintiffs claimed that the outcome was that investors were not aware of the implicit risks of these investments because a registration statement was never filed with the SEC or state regulators.

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