Top 10 Legal Cases Against Cryptocurrencies and Crypto Exchanges

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Over the past few years, cryptocurrency has caused a huge hype in the financial market. Currently, the adoption of digital assets is high and experts believe that in the future cryptocurrency could replace local or fiat currency. The repercussions have taken a back seat to the rapid transaction facilities offered by these digital assets. But crypto investments go wrong, leading to long-term legal cases. Here is a list of the top legal cases against cryptocurrencies and crypto exchanges that have caught the attention of crypto enthusiasts around the world.

New York Attorney General’s Office vs. Bitfinex: The New York OAG was investigating Bitfinex over allegations of fraud and deceptive investors. Prosecutors alleged that the cryptocurrency exchange and its associated stablecoins company Tether covered up a loss of US $ 850 million and, in so doing, misled investors. The New York County Supreme Court judge ruled not to close the investigation into the companies and, in response, the companies said they would appeal the decision.

SEC vs. Trendon Shavers: Bitcoin Savings and Trust (BTCST) operator Shaver’s has undergone a legal review by the SEC for soliciting illicit investments in bitcoin-related opportunities from multiple lenders. This case provided the judge with insight into how bitcoin-denominated damages can be viewed in the future, using only the daily price of bitcoin at the time the program was discovered.

Florida State vs. Espinoza: In August 2021, the Bitcoin Foundation filed an amicus curiae based on the case filed against Florida resident Pascal Reid, seeking to dismiss a money transfer charge. Reid and Mitchell Anber Espinoza were arrested in the undercover operations where they made fake transactions with undercover agents and converted US $ 30,000 into bitcoins. Both were filed against money laundering charges but dismissed because bitcoin is not real money.

Oracle vs. CryptoOracle: Software giant Oracle has filed a lawsuit against blockchain startup CryptoOracle, with allegations of trademark infringement and cybersquatting, followed by the startup’s advertisement on CNBC. According to the complaint, the startup used the Oracle name to bolster its reputation. The tech giant initially tried to resolve the issue outside of court, but this resulted in the CryptoOracle trademark filing.

South Korean crypto exchange Bithumb sued for fraud: South Korean crypto exchange subsidiary Bithumb was prosecuted on criminal charges of fraud and also faced alleged breach of contract in Hong Kong. The accusations were that the exchange acted in bad faith when it announced its intention to open an exchange in Thailand and used that announcement to get people to invest in its BXA coin. Bithumb lost the case and was accused of paying $ 100 billion in compensation.

Harrison Hines vs. Joseph Lubin: Founder of the Token Foundry startup incubated by ConsenSys, Harrison Hines alleged that his former business partner Joseph Lubin had broken the contract and issued him US $ 13 million. The case went to the New York Supreme Court and mentioned that Lubin had something to do with breach of contract, quantum meruit, fraud, unpaid profits, etc.

US v Ross William Ulbricht: In this case Ulbricht was accused of running the former online black market Silk Road. In February 2014, he was charged with hacking, drug trafficking, money laundering and other illicit activities. He would have used Bitcoin for all of his transactions. On the grounds that bitcoin is not real money, he pleaded not guilty.

Supreme Court of India v Reserve Bank of India: The Supreme Court openly criticized RBI’s handling of the cryptocurrency ban in July 2018. During its session, the court ordered the RBI to respond within two weeks. The case went through a difficult period as the Indian government considered a blanket law that made the use of cryptocurrencies illegal for Indians.

Bank Santander vs. Mercado Bitcoin: Santander was sued by Mercado Bitcoin in 2018 following the foreclosure and closure of the exchange account. The Spanish bank mainly appealed against the court’s decision, but then denied it and agreed to follow the court’s decision to pay the fine.

US Federal Trade Commission vs. Bitcoin Funding Team: In March 2018, the US FTC froze the accounts of the Bitcoin Funding Team through a court order alleging the practice process of deceptive marketing practices. In 2019, the FTC announced that it had settled the fees, which totaled less than about US $ 1 million.

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