NEW YORK July 25– Wrap up The global cryptocurrency(Crypto) and Blockchain industries are facing an onslaught of legal challenges, with over 100 active lawsuits filed against various entities as of the latest research. Allegations of fraud, securities violations, and market manipulation are at the forefront of these legal battles.
To date, a conservative count has come up to 107 active cases as of now.
The SEC’s (US) involvement in the legal landscape is undeniable, as it targets various cryptocurrency exchanges and companies with allegations ranging from fraud to securities violations and market manipulation.1
The SEC has filed lawsuits against Ripple Labs, Binance, Coinbase, BlockFi, and Poloniex in the United States. The agency contends that Ripple Labs’ XRP cryptocurrency is an unregistered security, accuses Binance of operating an unregistered securities exchange, alleges that Coinbase traded at least 13 crypto assets that qualify as securities without SEC registration, claims that BlockFi offered unregistered securities through interest-bearing accounts, and points to Poloniex’s operation of an unregistered securities exchange.
Other countries with large economies are also grappling with a significant number of lawsuits related to cryptocurrencies and Blockchains.
The United Kingdom, China, India, and South Korea have emerged as notable hubs for legal action in this rapidly evolving industry.
Legal experts foresee that the number of cryptocurrency-related lawsuits is poised to escalate in the coming years.
As the crypto space continues its expansion, regulators worldwide are expected to adopt more assertive stances to enforce compliance, inevitably leading to a surge in litigation against cryptocurrency firms.
Below is an overview of the top 10 countries with the highest number of active lawsuits concerning cryptocurrencies and blockchains:
United States – 60, United Kingdom – 15, China – 10, India – 5, South Korea – 5, Japan – 4, Canada – 3, Australia – 3, Singapore – 2.
Regulators outside the United States have also actively taken measures to address concerns surrounding cryptocurrencies and Blockchain-related activities. In the United Kingdom, the Financial Conduct Authority (FCA) has banned certain exchanges from operating within the country and issued warnings to investors about the risks involved in cryptocurrency investments.
China has taken a more stringent approach, imposing an outright ban on cryptocurrency trading and mining. Meanwhile, India has witnessed a surge in lawsuits against cryptocurrency exchanges and companies operating in the crypto space.
Key Legal Issues Surrounding Cryptocurrencies
In the realm of cryptocurrencies, legal challenges often revolve around several recurring themes. One significant issue pertains to securities law violations, as some cryptocurrencies face allegations of being classified as securities, leading to stringent regulatory scrutiny.
Another prevalent concern involves cases of fraud, which have been pervasive in the crypto space, encompassing schemes such as pump-and-dump and exit scams.
Additionally, accusations of market manipulation have been directed towards specific cryptocurrency exchanges, further complicating the landscape.
Moreover, there have been instances of cryptocurrencies being misused for money laundering purposes. In light of these challenges, investors are strongly advised to exercise caution when participating in the rapidly growing crypto market and to thoroughly evaluate the legal risks involved.
Notable Legal Battles in the Crypto Sphere
The SEC v. Telegram: In 2019, the SEC initiated legal action against Telegram, alleging the sale of $1.7 billion worth of unregistered securities known as Grams. The case was settled in 2020, with Telegram agreeing to reimburse investors and pay an $18.5 million fine.
The SEC v. BitConnect: In 2019, the SEC sued BitConnect, a cryptocurrency lending platform, for orchestrating a Ponzi scheme. BitConnect’s alleged promise of high returns on investments was exposed as using new investors’ funds to pay off previous investors. The platform ceased operations in 2018, and its founders face criminal charges.
The CFTC v. BitMEX: In 2020, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against BitMEX, a prominent cryptocurrency exchange, alleging the operation of an unregistered futures market. BitMEX settled the case in 2020, agreeing to pay a $100 million fine and subjecting itself to CFTC registration.
These are only prominent and reported examples of the mounting legal battles in the crypto and Blockchain sectors, they indicate the increasing complexities of this dynamic and rapidly changing industry.
As the crypto space expands, experts anticipate a further surge in lawsuits, necessitating continued vigilance and awareness for investors and industry players alike.
- apnews: https://apnews.com/article/cryptocurrency-sec-treasury-banking-binance-coinbase-53b0aaac91df229f28756e2fb8e7f846[↩]
