Investors allege that unscrupulous cryptocurrency companies deceived them into buying unregistered securities. The accusations are against Binance, TRON Foundation, BitMEX, and KuCoin, among others.

A group of investors filed multiple lawsuits against 11 cryptocurrency companies, alleging that the latter deceived them into buying securities that were unregistered in the United States.

Lawyers from the Roche Cyrulnik Freedman law firm filed the charges on March 3rd in a New York court. According to legal documents, the alleged victims stated that the exchanges and token issuers took advantage of the market’s lack of understanding of how cryptocurrencies like Bitcoin worked.

The lawsuits include a total of 42 defendants in 16 countries related to Binance, BitMEX (HDR Global Trading), Civic, BProtocol, Status,, KayDex, Quantstamp, BiBox, TRON Foundation, and KuCoin. Among the names appearing in the documents are Brendan Blumer (, Dan Larimer (, Vinny Lingham (Civic), Justin Sun (TRON Foundation), Changpeng Zhao (Binance) and Arthur Hayes (BitMEX), according to digital media.

The lawsuits point to several fronts, arguing that there were violations of US federal or state securities laws. Likewise, they are against cryptocurrency issuers and exchanges, since these companies could have deceived investors by selling them illegal securities in the form of digital tokens.

The investors note that the companies launched the tokens as utility tokens and told them that they did not need to be registered as securities with the US Securities and Exchange Commission (SEC). Besides, the plaintiffs allege that the tokens fail the Howey test, a US regulation that serves to determine whether an asset is a security, according to the parameters of federal laws.

Regarding this lawsuit, a spokesperson called the allegations opportunistic and said that they are aware that the same has happened against several blockchain and cryptocurrency companies. He said that they have not yet received any claim, but that they are well prepared to deal with any legal issues that may arise.

The accusing investors did not clarify when they made these investments or what reparation they are requesting for the alleged deception of which they were victims.

It is important to highlight that the law firm that is trying this case is the same one that sued Bitfinex in October 2019 for alleged manipulation of the crypto market. Also, it tried the famous case of Ira Kleiman against Craig Wright, in which the latter was sued for a billion US dollars.

The filing of the lawsuits is the first step for a legal battle that could last several years, since it not only involves the jurisdiction of the USA, but also that of other countries such as China, Singapore, Switzerland, Israel, Japan, Canada, and Estonia, among others.

To conclude, investors need to be reminded, especially those venturing into the cryptocurrency world, to stay informed on the movements of the assets that they wish to buy. Thus, they are more likely not to be victims of unscrupulous companies. The reading of Crypto World Journal articles would be very useful for that purpose.

By Alexander Salazar


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