A federal district court recently dismissed with prejudice a putative class action against the cryptocurrency exchange Coinbase, where the plaintiffs sought to hold the exchange liable for the sale of unregistered securities on behalf a nationwide class. The court held that Coinbase neither directly sold the accused tokens to plaintiffs nor actively solicited their sale, and thus plaintiffs’ federal claims must be dismissed. This decision has important implications for digital asset exchanges, which have faced a significant increase in class actions alleging the exchanges are themselves liable for the sale of unregistered securities.Continue Reading Court Dismisses Class Action Seeking to Hold Cryptocurrency Exchange Coinbase Liable for Sale of Unregistered Securities
Securities
S.E.C. Wins Summary Judgment Determination That Cryptocurrency Token Qualifies as a Security
By Sam Greeley, Andrew Soukup & Ashley Simonsen on
In a recent decision, a federal judge granted summary judgment for the Securities and Exchange Commission (SEC) finding that the LBC cryptocurrency token qualifies as a security. While the ruling is confined to this specific token, it represents a victory for the SEC’s assertions that many cryptocurrencies, including so called “utility tokens,” represent securities that need to be registered with the agency. The Court also held that the makers of the LBC token, LBRY, Inc., had fair notice that the token was subject to the securities laws. Considering the ongoing class actions and enforcement proceedings litigating this issue across several cases, companies operating in the cryptocurrency space, including cryptocurrency exchanges, should follow this development to assess any possible impact on their businesses.Continue Reading S.E.C. Wins Summary Judgment Determination That Cryptocurrency Token Qualifies as a Security
Fourth Circuit Holds Statements About Importance of Data Security Not Actionable
By Amy Heath & Eric Bosset on
The Fourth Circuit’s opinion last week in In re Marriott International, Inc., — F.4th —-, No. 21-1802 (4th Cir. Apr. 21, 2022), could prove useful to companies facing data breach class actions. Following a data breach of the Starwood guest reservation system, Marriott investors brought securities claims alleging that the purported failure to disclose vulnerabilities in Starwood’s IT systems rendered certain public statements false or misleading.Continue Reading Fourth Circuit Holds Statements About Importance of Data Security Not Actionable