The most critical question: are the lawsuits time-barred?

Litigation boutique Roche Cyrulnik Freedman unleashed Friday a torrent of class action lawsuits against seven cryptocurrency issuers and four exchanges according to Reuters. The plaint: These entities allegedly sold crypto assets worth billions of dollars to investors without complying with U.S. law relating to securities. The suits allege that the defendants did not register the digital assets with regulators. Also, that the exchanges made money from listing the unregistered assets. The defendants include exchanges Binance, Bibox, BitMex and KuCoin, and issuers Tron, Block.one, Bancor, Civic, Kybercoin, Status, and Quantstamp. However, what really are the chances of these lawsuits succeeding? Lawyer Cal Evans weighs in on the subject. (COIN TELEGRAPH)

The lawsuits are inherently weak

“Upon closer inspection of the lawsuits and a high-level view of all facts surrounding them, there are a large number of holes,” says Evans. “These holes can give some good indication as to how the lawsuits will likely pan out.”

Cal Evans on the holes – one by one

According to Evans, the lawsuits are a delayed legal action. That’s because the U.S. Securities Act imposes a two-year statute of limitations against private claims brought forth by individuals. The first sales of the digital assets in question took place well over two years ago, observes Evans. This implies that the plaintiffs are time-barred from proceeding with the suits.

Another serious lacuna is that the claimants agreed with the defendants to waive any rights to file a class-action lawsuit. This is apparent from the terms and conditions displayed on the defendants’ websites.

Further, by naming some defendants in their individual capacities, the plaintiffs were using “scare tactics,” says Cal Evans.

However, the principle of the “corporate veil”  has been ignored, he says. This principle demarcates personal assets from corporate liability.

It also appears that the litigants may have misrepresented their citizenship or residency of the U.S. while entering the transactions with the defendants. Note that many of the defendants are not U.S. citizens or residents, and their terms and conditions prohibit conducting business with U.S. citizens and residents.

Bottom line

Evans also takes a stab at Roche Cyrulnik Freedman, the firm filing the suits. Specifically, the firm’s handling of their client Craig Wright’s lawsuits: “Their relative lack of success in improving his position or overall reputation has been noticeable.”

“It seems that given Roche Freedman’s performance in the space thus far, the firm may lack the requisite crypto knowledge to truly be effective in such lawsuits,” concludes Evans.

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