According to Coinmarketcap, the global aggregate crypto value stands at $1.24 trillion. Sounds like a lot, except when you recall that the total market cap stood at over $3 trillion last November. Crypto, including the most popular tokens like Bitcoin and Ether, have collapsed in value in a few short months. And like significant financial losses in traditional securities, lawsuits are quick to follow the dramatic decline in crypto.
According to WSJ. com, there has been a “surge” in lawsuits swirling around crypto offerings alleging unregistered securities or pump and dump ploys. The recent spectacular collapse of erstwhile algorithmic stablecoin TerraUSD – filled the news with stories of holders losing all of their money. While the story of TerraUSD may attract a lot of attention there are many other smaller tokens that have not delivered on the expectations for purchasers to see their values gain.
The article shares an anecdotal experience of one crypto investor who purchased GYEN, committing $335,000 to the token only to see its value dropping to just $30oo in a matter of hours. This investor is not alone.
Several weeks ago a similar report in Bloomberg claimed that there are over 200 crypto class action lawsuits and other litigation – an increase of 50% since the beginning of 2020. The report cited Morrison Cohen’s crypto litigation tracker. Law firms are struggling to keep up with the rising demand.
Meanwhile, exchanges and crypto issuers are lawyering up, paying for big law to help them navigate the choppy regulatory environment – one that does seem destined to calm at any time in the near future.
