Lawsuit arrives for crypto exchanges
A group of cryptocurrency exchanges and insurers are being sued by investors in an alleged fraud case, it has been revealed.
Class action lawsuits have been brought against a range of institutions.
In total, four cryptocurrency exchanges and seven insurance providers have been targeted.
The lawsuits were filed in the US District Court in Manhattan on Friday of last week.
The plaintiffs alleged that the firms involved contravened securities laws in the US.
They accuse the firms of having sold non-registered tokens with a total value of billions of US dollars.
Various firms have been named in the lawsuit, and it is understood that senior executives at the firms have also been named.
Some of the insurance companies which have been named are Bancor, Block.one, Tron and Civic.
Others include status, Kybercoin and Quantstamp.
In terms of the exchanges which have been named, big names like Binance are on the list.
The others are KuCoin, BitMEX and Bibox.
As the news of the lawsuit broke, representatives of each side in the fight expressed their opinions.
One of the lawyers working on the case, Phillipe Selendy from the law firm Selendy and Gay, compared the allegations in this case to the economic crash of a decade or so ago.
“Not unlike the mortgage crisis that led to the Great Recession, the alleged pattern of misconduct by exchanges and issuers yielded billions in profits for wrongdoers through a basic betrayal of public trust”, Selendy said.
One of the insurance firms named in the case hit back.
“We are aware of the opportunistic complaints filed against several blockchain and cryptocurrency companies”, said a spokesperson for Block.one.
“We have not been served with any claims but are well prepared to address anything that may arise”, it added.
US regulator secures default entry
A regulatory body in the US has managed to get a default entry against a person accused of crypto fraud.
The Commodity Futures Trading Commission (CFTC) revealed that it had secured the entry against Benjamin Reynolds, who served as the director of a scheme called Control-Finance.
The certificate of default, which came from a court clerk, was released on Monday of this week.
Reynolds has been accused of failing to respond to claims from the CFTC and has also been hard to track down.
At the time the charges were released in mid-2019, the Director of Enforcement at the CFTC – James McDonald – said that there was a risk that fraud like that of which Reynolds is alleged to have carried out could “hinder innovation”.
“The CFTC will continue to vigorously police the Bitcoin markets, including fraudulent trading activity as alleged in the Complaint here”, he said.
“Fraud in these markets not only harms customers, but if left unchecked, it could also hinder innovation.”
“We caution potential virtual currency customers, once again, that they should engage in appropriate diligence before purchasing or trading virtual currencies”, he added.