A Manhattan federal judge dismissed a class action lawsuit against Bancor for securities fraud after ruling the plaintiff’s allegations were inadequate to convict the court. The dismissal of the case marks the first such decision, “in a number of similar cases filed by crypto investors represented by Selendy & Gay and Roche Cyrulnik,” according to a report.
US courts have no jurisdiction
In their motion against Bancor, which has offices in Switzerland and Israel, the plaintiffs cited by Timothy Holsworth argued that the “Protocol’s BNT token is a security and thus falls under the US Securities Act”. In addition, plaintiffs alleged that Bancor “made numerous false statements and omissions that led reasonable investors to conclude that the BNT tokens were not securities”.
In her defense, however, Bancor countered by arguing that a US lawsuit was “inappropriate due to the company’s international and geographic nature.” According to a report, the Bprotocol Foundation is registered under Swiss law and the organization has offices in Zug, Switzerland, and Tel Aviv, Israel. In addition, the four founders of Bancor live in Israel.
US investors versus non-US token issuers
Meanwhile, plaintiffs had insisted that the 587 BNT tokens purchased by a Wisconsin resident on September 4, 2019 be transferred to the U.S. courts by William Zhang. Zhang, who originally filed the lawsuit, bought the $ 212.50 tokens from Coss, a digital exchange based in Singapore. However, in dismissing the case, U.S. judge Alvin Hellerstein said:
Wherever Bancor is currently located, New York is not a sensible and convenient place to conduct this legal battle.
In addition to the lawsuit against Bancor, the plaintiffs have filed motions against issuers from EOS, TRX, KNC and OMG. Centralized exchanges outside of the US such as Binance and Kucoin are also included in the lawsuit.
What do you think of this US judge’s ruling? You can share your views in the comments section below.
Photo credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or an invitation to submit an offer to buy or sell, or a recommendation or approval of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.