Seven reputed companies namely KuCoin, BiBox, BitMEX and parent company HDR Global Trading Limited, and alleged crypto issuersBlock.one,Quantstamp, KayDex, Civic, BProtocol, Status, the Tron Foundation and Binance have come under scrutiny. These firms have been targeted via eleven lawsuits on 3 April in the Federal Court of New York City.
The lawsuits were filed by Roche Freedman, the same law firm involved in the proceedings of the on-going dispute regarding the estate of late David Kleiman and Craig Wright.
The reports also contain the names of the Principals associated with the respective crypto firms, namely, Changpeng Zhao, Dan Larimer, Vinny Lingham, and Brendan Blumer.
Why these Crypto Firms are Being Targeted?
These crypto firms were accused of wholesale securities violations under the laws of the state of New York. They were accused of both selling unlicensed securities and also of being involved in the manipulation of markets. These, as the plaintiffs argued, were well thought out scams.
They argue that the companies purposefully withheld information from investors so that the violations do not become apparent until the end of the token sales. Some of the assets named in this respect are LEND, EOS, BNT, OMG, ELF, TOMO, CVC. They were all thought to have securities involved and were yet unlicensed, hence provoking this lawsuit.
Proceedings can Take Time
Two major factors can delay the proceedings. Firstly, many of the defendants are based outside US territory, and hence have to be summoned under the Hague Convention. Moreover, it invokes the questions regarding international-regulations to crypto trading as the laws are specific to the US.
Secondly, the COVID-19 is going to delay foreign travel, and also restrict the functioning of the American courts for a while, making it difficult to proceed.