Footnotes
1 This article relies primarily on data from the Stanford Law School Securities Class Action Clearinghouse. Current Trends in Securities Class Action FilingsStanford Law School Securities Class Action Clearinghouse (last accessed February 14, 2024).
2 Olga Kharif and Yuki Yang, Crypto hedge funds gear up for ‘token frenzy’ after 2023 reboundBloomberg (December 27, 2023).
3 Andrew Hecht, Bitcoin- Will Cryptos Continue to Rally?, Barchart (November 10, 2023); Teresa G. Bitcoin ETF Exuberance Drives Four-Week ‘Nothing to Sell’ RallyBloomberg (November 10, 2023).
4 According to data from 2020-2023 for the filing of cryptocurrency securities class actions. Current Trends in Securities Class Action Filings, supra Note 1.
5 Richard Hawes, et al. v. Argo Blockchain plc, et al. (“American Depository Share Securities Litigation”)23-CV-07305 (SDNY Jan. 26, 2023), originally filed in EDNY and transferred to SDNY on Aug. 18, 2023.
6 Layer Zero, et al. v. Pollen Mobile LLC, et al. (“Pollen Coin Securities Issue”)23-CV-04023 (ND Cal. Aug. 9, 2023).
7 Securities Class Action Filings 2023 Year in ReviewCornerstone Research 2 (2023), “Files containing allegations against cryptocurrency exchanges – including all five filings with multiple cryptocurrency classifications – accounted for 7 of 14 (50%) of total cryptocurrency-related filings in 2023.”
8 Nir Lahav, etc. v. Binance Holdings Limited, et al. (“Cryptocurrency Securities Litigation”)23-CV-05038 (ND Cal. Oct. 2, 2023), CAC at ¶ 1. Please note that “CAC” herein refers to “Class Action Complaint,” “ACAC” refers to “Amended Class Action Complaint.” “FACAC” refers to the “First Amended Class Action Complaint,” and “CCC” refers to the “Corrected Consolidated Complaint,” for related citations.
9 Trey Green, et al. v. Zac Prince, et al. (the “BlockFi Interest Account Securities Issue”)23-CV-01165 (DNJ Feb. 28, 2023), CAC at ¶ 2, 3. BlockFi is insolvent, so this lawsuit is brought against, among othersIts former executives and members of its board of directors.
10 Mislav Basic, et al. v BProtocol Foundation, et al. (“BNT Token Securities Issue”)23-CV-00533 (WD Tex. May 11, 2023), ¶ 1 at FACAC.
11 William McGreevy, et al. v. Digital Currency Group, Inc., et al. (“Digital Asset Debt Securities Issue”), 23-CV-00082 (D. Conn. Jan. 23, 2023), Am. Compl. 3. Genesis Global Capital is insolvent, hence this suit is brought against, among othersIts parent company and former executives.
12 Louis Zhao, et al. v. Eqonex Limited et al. (the “Eqonex Limited Securities Issue”), 23-CV-03346 (SDNY Apr. 20, 2023), ACAC at p. 5. Eqonex is insolvent and appears in the lawsuit as a non-party defendant; This case is brought against, among othersIts former executives and members of its board of directors.
13 Andrew Samuels v. United States. Lido DAO et al. (“LDO Tokens Securities Litigation”), 23-CV-06492 (ND Cal. Dec. 17, 2023), Compl. at ¶ 1.
14 Justin Dufoe, et al. v. DraftKings Inc., et al. (“NFTs Securities Issue”), 23-CV-10524 (D. Mass. Mar. 9, 2023), Am. Compl. at ¶ 1.
15 BNT Token Securities IssueFACAC at ¶ 4.
16 id. at ¶¶ 6, 12.
17 Id. at ¶ 59.
18 Id. at ¶¶ 7, 91.
19 Id. at ¶¶ 180, 181.
20 Id. at ¶¶ 182, 184.
21 Id. at ¶¶ 224-227.
22 Id. at ¶¶ 235-237.
23 Id. at ¶¶ 243-245, 251-254.
24 American Depositary Share Securities IssueACAC at ¶ 23.
25 Jaime R. Moreno, et al. v. Marathon Digital Holdings, Inc., et al. (“Marathon Digital Holdings, Inc. Securities Litigation”)23-CV-00470 (D. Nev. Mar. 30, 2023), CAC at ¶ 2.
26 Parker Pelham, et al. v. VBit Technologies Corp., et al. (“VBit Mining Contracts Securities Litigation”)23-CV-00162 (D. Del. Feb. 13, 2023), CAC at ¶ 34.
27 American Depositary Share Securities IssueACAC at £40.
28 Id. at ¶ 63
29 Id. at ¶¶ 64-65.
30 Id. at ¶ 114.
31 Id. at ¶¶ 77-78.
32 Id. at ¶ 79.
33 Id. at ¶¶ 67, 76, 278.
34 Id. at pp. 81, 92.
35 Id. at ¶¶ 257, 269.
36 NFTs securities issue, M. Compl. at ¶ 1.
37 LDO Token Securities Issue, Compl. at ¶¶ 104-14.
38 Pollen Coin Securities Issue, Compl. at ¶¶ 114-20.
39 NFTs securities issue, M. Compl. at ¶ 1.
40 Id. at ¶¶ 26, 33, 34, 63.
41 Id. at ¶ 1.
42 Id. at ¶¶ 158-169, 176-196.
43 Mark Cullen, et al. v. Ryvyl Inc., et al. (“Ryvyl Inc. Securities Litigation”)23-CV-00185 (SD Cal. Feb. 1, 2023), ACAC at ¶ 31.
44 Matthew Shafer, et al. v. Signature Bank, etc. (the “Signature Bank Securities Issue”)23-CV-01921 (EDNY Mar. 14, 2023), CCC at ¶ 10, 40. Regulators seized Signature Bank, so this case was brought against, among othersIts former executives and members of its board of directors.
45 Daniel Harper and others. v Shaquille O’Neal, et al. (“ASTRALS NFTs Securities Litigation”)23-CV-21912 (SD Fla. May 23, 2023), ACAC at ¶ 18.
46 ASTRALS NFTs Securities IssueACAC at ¶¶ 1, 4, 140-43.
47 ASTRALS NFTs Securities IssueCAC at ¶ 2.
48 ASTRALS NFTs Securities IssueACAC at ¶¶ 1, 7, 19.
49 Cf. Securities Class Action Filing 2023 Mid-Year Assessment, Cornerstone Research 2 (2023), “As a result of last year’s cryptocurrency market turmoil and high-profile bankruptcies (such as FTX, Celsius Network, Voyager, BlockFi, and Genesis), cryptocurrencies have come under heightened scrutiny from US regulators.” (Emphasizing the impact on the crypto market from several high-profile bankruptcies discussed in this article).
50 Dechert LLP, Cryptocurrency Securities Class Action Litigation 2022 Year in Review 5 (March 27, 2023).
51 American Depositary Share Securities IssueACAC at £79.
52 Cryptocurrency securities issueCAC at ¶ 2.
53 Eqonex Limited Securities IssueACAC at ¶ 17, 55.
54 Pollen Coin Securities Issue, Compl. at ¶¶ 63, 72.
55 Signature Bank Securities IssueIn CCC 25.
56 Digital asset debt securities issue, M. Compl. at ¶¶ 13-14; BlockFi Interest Account Securities IssueCAC, Certification Pursuant to Federal Securities Law, ¶ 5 (“Plaintiff’s assets are fixed and unavailable and their value is uncertain and are valued at nil for purposes of estimating plaintiff’s losses herein.”).
57 20-CV-10832, 2023 WL 4507900 (SDNY July 13, 2023).
58 See, like Alison Frankel, ‘The ripple effect from the ruling in the SEC crypto case could be a game-changer for class action defendantsReuters (July 14, 2023).
59 23-CV-1346, 2023 WL 4858299 (SDNY July 31, 2023).
60 654 F. Supp. 3d 224 (S.D.N.Y. 2023).
61 See also this Risley v. Universal Navigation Inc, et al.22-CV-2780, 2023 WL 5609200 (SDNY Aug. 29, 2023) (case with similar facts Underwoodwho quoted Underwood (to conclude that the defendant was also not a seller within the meaning of the federal securities laws, thus allowing the court to avoid deciding whether cryptocurrencies are securities or not).