Cryptocurrencies and exchanges in the eye of the judicial cyclone

Block.one, Tron, Binance, BitMEX, Bibox, Quantstamp… Many companies in the cryptocurrency industry are affected by a complaint series. Reason: to have sold tokens to investors which would in reality be unregistered securities.

The legal offensive against the crypto industry is massive. Investors have filed complaints against a large number of players. In the United States, class actions (collective actions) thus target 7 cryptocurrency issuers and 4 exchanges.

And the reason for these procedures is not new. He has even already justified several actions in the US on the part of the stock exchange regulator, the SEC. Complainant investors accuse these companies of selling billions of dollars non-registered assets in violation of securities legislation.

Cryptocurrencies issued as securities

The main players in the market, including Block.one, Tron, Binance or BitMEX, are therefore being sued for their token issues or their role in their exchanges. Different cryptocurrencies like EOS, Bancor token (BNT) and Status (SNT) are thus targeted.

It is the very nature of these digital assets that is targeted by these collective actions. The regulatory framework under which the blockchain and crypto companies operate is also under attack. And the SEC’s proceeding against Block.One notably supports the claims.

The issuer of the EOS token raised $ 4 billion in 2018 through an ICO. The regulator accused him of selling securities without authorization. Last September, Block.One has agreed to pay 24 million dollars to end this procedure.

Complicit and unregulated exchanges

Brokers and exchanges are not forgotten. Investors accuse BitMEX, in addition to selling unregistered securities, of manipulating the cryptocurrency market for its own profit. As for Binance, it is accused of operating by breaking the law, exposing investors to risks.

Binance and Issuers Wrongly Engaged in Millions of Transactions – Including Solicitation, Offer and Sale of Securities – Without Registering Tokens as Securities, and Without Binance Registering with the SEC as a stock exchange or broker. As a result, investors have not been made aware of the significant risks inherent in these investments, as required by federal and state securities laws, "consider the complainants.

As the site reports offshorealert, however, this judicial offensive was not confined to the United States alone. In fact, a total of 11 collective actions have been launched in 16 countries and targeting 42 actors, physical and moral personalities. All are for the sale of unregistered securities.

Read also : Ripple to face lawsuit against XRP investors

But why these procedures en masse in 2020? Their origin is often based on an ICO in 2018. However, as a lawyer interviewed by Decrypt, beyond two years, the facts of fraud are prescribed in the United States.