Latest Crypto Florida Class Action Targets Binance
All three suits cite state level Blue Sky laws, which may alter the crypto litigation playbook going forward
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The law firm behind recent class action suits against FTX and Voyager Digital has filed a new complaint against Binance on behalf of “hundreds of thousands of victims.”
The Moskowitz Law Firm, led by class action veteran attorney Adam Moskowitz, filed its complaint against Binance, CEO Changpeng Zhao, and various influencers who promoted the exchange in Florida on Friday.
The firm has focused all three of its crypto complaints on a similar issue based on state laws in Florida: Blue Sky laws, which industry participants are eyeing when it comes to the outcome of separate litigation tied to FTX.
Binance, FTX and Voyager and affiliated individuals “all sold and promoted unregistered securities,” Moskowitz told Blockworks.
Florida’s Blue Sky laws are state-level securities fraud regulations designed to protect investors and consumers. The law requires securities to be registered in a truthful and accurate manner.
Because crypto is not traded on a national securities exchange, the asset class can fall under state-level regulations, legal experts say, opening up the possibility for more unregistered securities complaints.
“The state ‘Blue Sky’ theory seen here doesn’t arise in a lot of other cases when you’re dealing with nationally exchange-traded securities, because there’s a federal statute that says you can’t bring a class action for those times,” James Vivenzio, senior counsel at Perkins Coie, said during a recent webinar.
Moskowitz and his firm have been investigating Binance and its alleged securities fraud for the past year, he said.
The “investigation revealed that Binance is also selling unregistered securities and thus needs to be held accountable. Each and every promoter of these unregistered securities, including Miami Heat star Jimmy Butler, will be held responsible,” Moskowitz said. “We will not stop until every crypto victim is made whole.”
Shortly before the class action was filed against Binance, the CFTC sued the exchange for allegedly breaking derivatives trading laws. In the suit, the CFTC claims bitcoin and ether are commodities, as opposed to securities.
The firm’s FTX and Voyager suits are still being litigated.
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