investors to buy and sell scores of digital tokens, the cost of getting it wrong is potentially catastrophic, industry lawyers say. are commodities, like gold, which have no full-time federal regulator.įor trading venues that allow U.S.
They also create potentially crippling liabilities for anyone who skirts the law.Ĭryptocurrency platforms have sought to minimize headaches by arguing that the tokens they list in the U.S. laws impose meticulous regulations and burdensome disclosure requirements on issuers and intermediaries that sell securities, a category of assets that includes stocks and bonds. Investors have filed eight class-action lawsuits related to cryptocurrencies in 2022 so far, compared with 11 in all of 2021, according to a database maintained by Stanford University and Cornerstone Research. Lawsuits related to cryptocurrencies are up this year. “The more money at stake, the higher the probability of litigation, and with the sharp downturn in crypto values, the incentives to litigate have turned up as sharply,” saidĪ former SEC commissioner who teaches law at Stanford University.
The evaporation of some $1.5 trillion from cryptocurrency markets in the past six months could give investors a new incentive to test that power.
