US Crypto Exchanges May Face Class Action Lawsuits: Reports

According to a March 9 Fox Business report, the next salvo in Uncle Sam’s war on crypto could be a massive class-action lawsuit filed on behalf of retail investors against top exchanges.

The outlet reported that leading securities attorney Tom Grady is preparing for potential lawsuits against America’s largest crypto companies, including Coinbase, Robinhood and Kraken.

The allegation is the same old story that the Securities and Exchange Commission keeps repeating – the illegal sale of unregistered securities. In a press release shared with the outlet, Grady stated:

“We believe that Coinbase, Robinhood and other exchanges have broken the law, and investors who lost money buying cryptocurrencies on their platforms may be entitled to recover those losses.”

Crypto has not been classified yet

Furthermore, the securities lawyer is chasing customers of Coinbase and other exchanges who have lost their crypto investments.

However, Congress has yet to officially classify digital assets as securities, so regulators like the SEC have taken matters into their own hands with enforcement actions.

There has been a lot of backlash from industry leaders and experts over what many see as an extrajudicial crackdown by the SEC. US lawmakers have been stalling on a regulatory framework, so no agency has full jurisdiction over the asset class yet.

Crypto lawyer John Deaton commented:

“This is yet another example of excessive litigation being created and encouraged by a lack of regulatory clarity in the United States regarding digital assets.”

He added that when there is regulatory uncertainty coupled with an anti-crypto campaign by regulators, “it creates a hotbed for litigation.”

“We will continue to see litigation chaos in the United States, further driving innovation abroad,” the lawyer concluded.

The CEOs of Coinbase, Circle and Ripple have all warned of the innovation and talent exodus from the US if the crackdown on crypto and fintech continues.

Crypto markets plummet

It’s another red Friday morning in the Asian trading session as markets bleed out again. Markets have dumped nearly 7% in the past 12 hours or so, with total capitalization falling to a two-month low of $970 billion.

BTC has lost 8% on the day, briefly falling below $20,000 before recovering to just above that at the time of writing. Meanwhile, Ethereum has fallen 7.6% in a plunge to $1,426, according to CoinGecko.