On April 3, a massive deployment of lawsuits were filed against major crypto industry players across the globe. The eleven lawsuits were filed in the United States District Court for the Southern District of New York in what is being called “Bloody Friday” for the industry.
These lawsuits are class action in nature. For those unfamiliar with the term, this means a group of people have joined together to file a lawsuit against another party. Class action lawsuits are not very popular on an international level for a number of reasons, the most prominent being that most of the time after filing the suit, claimants are allowed to grow their class by seeking new parties to add to the lawsuit. Many people believe that fake claimants come forward looking to simply “join the party,” or people that otherwise had no issue with the defendant suddenly develop one. These additional claimants can be sought so that the many hundreds of individuals claims cannot possibly be reviewed, resulting in some claimants receiving money upon the lawsuit’s success with little to no investigation. The U.S. is very well-known for class action lawsuits.
The suits filed on Friday involve both private individuals and companies operating in the crypto space, and the claims within are a collection of various securities violations pursuant to U.S. securities laws. As a result, the claimants want compensation for damages, claiming that they have suffered as a result of these companies breaking the law.
Upon closer inspection of the lawsuits and a high-level view of all facts surrounding them, there are a large number of holes. These holes can give some good indication as to how the lawsuits will likely pan out. Let’s look at them one at a time.
The filing law firm’s performance
The lawsuits were filed by Roche Freedman, a New York-based law firm that shot to fame in the crypto space by representing Craig Wright in a number of his lawsuits. These lawsuits were against the parties who…