US Crypto Exchanges Could Face Class Action Lawsuit: Reports
According to a March 9 Fox Business report, the next salvo in Uncle Sam’s war on crypto could be a massive class action lawsuit filed on behalf of retail investors against top exchanges.
The outlet reported that leading securities lawyer Tom Grady is preparing for potential litigation against America’s largest crypto companies, including Coinbase, Robinhood, and Kraken.
The allegation is the same old story that the Securities and Exchange Commission keeps repeating – illegal sales of unregistered securities. In a press release shared with the outlet, Grady stated:
“We believe Coinbase, Robinhood, and other exchanges have violated the law, and investors who lost money purchasing cryptocurrencies on their platforms may be entitled to recover those losses.”
NEW: Crypto exchanges could face possible class-action lawsuit over the offering of unregistered securities.@coinbase @RobinhoodApp @JohnEDeaton1 https://t.co/yLUehnRcuG
— Eleanor Terrett (@EleanorTerrett) March 9, 2023
Crypto Has Not Been Classified Yet
Furthermore, the securities lawyer is chasing clients of Coinbase and other exchanges who have made losses from their crypto investments.
However, Congress has yet to officially classify digital assets as securities, so regulators such as the SEC have been taking things into their own hands with enforcement actions.
There has been a lot of backlash from industry executives and experts over what many views as an extrajudicial clampdown by the SEC. U.S. lawmakers have been procrastinating on a regulatory framework, so no agency has full jurisdiction over the asset class yet.
Crypto lawyer John Deaton commented:
“This is another example of excessive litigation being created and encouraged by a lack of regulatory clarity in the United States regarding digital assets.”
He added that when there is regulatory uncertainty coupled with an anti-crypto campaign by regulators, “it creates a litigation hotbed.”
“We will continue to see litigation chaos in the United States, further driving innovation abroad,” the lawyer concluded.
The chief executives of Coinbase, Circle, and Ripple have all warned about the innovation and talent exodus from the U.S. should the crackdown on crypto and fintech continue.
Crypto Markets Plunge
It is another red Friday morning during the Asian trading session as markets bleed out again. Markets have dumped almost 7% in the past 12 hours or so, with total capitalization falling to a two-month low of $970 billion.
BTC has shed 8% on the day, falling briefly below $20,000 before recovering to slightly above it at the time of writing. Meanwhile, Ethereum has tanked 7.6% in a fall to $1,426, according to CoinGecko.
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