New crypto litigation tracker highlights 300 cases from SafeMoon to Pepe the Frog

New crypto litigation tracker highlights 300 cases from SafeMoon to Pepe the Frog

A new tracker for crypto litigation from Morrison Cohen LLP displays details about more than 300 cases that have been settled or are currently being litigated since 2013.

Morrison Cohen, a New York-based company, caters to entrepreneurs, large financial institutions, and early-growth companies. It specializes in capital markets and business litigation. A cryptocurrency litigation team is also available.

The Morrison Cohen Cryptocurrency Litigation Tracker published May. 3. It contains all case developments related to the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission and Department of Justice (DOJ), as well as class action/private litigation.

According to the firm, the tracker will be updated regularly “to include the key rulings these litigations”, and also includes a host “articles, webinars and podcasts” as well as regulatory crypto announcements from different government agencies.

The tracker, which is basically a long pdf document, shows that there have been 17 cases of crypto so far.

Seven of them were combined by the CFTC, DOJ, and SEC. Some high-profile cases include the SEC v. Barksdale siblings who allegedly ran a fraudulent initial cryptocurrency offering (ICO) valued at $124 million and the SEC v. BlockFi digital asset platform, who agreed to pay a $100m penalty for failing to register its crypto lending products.

Most notable is however the ongoing DOJ case v.Ilya Lightenstein and Heather Morgan. The couple are accused of conspiring to launder funds in connection to the Bitfinex hack that resulted in the theft of 119,756 Bitcoins (BTC). Around the time of February’s arrests, 94,000 BTC were seized by DOJ special agents.

The SEC also announced this week that 50 additional positions will be added to its enforcement-focused “Crypto Assets & Cyber Unit.”

Today, we announced that we are strengthening the unit responsible to protect investors in crypto markets and from cyber-related threats. The new name of the Division of Enforcement is Crypto Assets & Cyber Unit. It will now have 50 positions.
U.S. Securities and Exchange Commission, May 3, 2022

Related: Is New York State losing sight of the goal of crypto fraud?

However, the majority of the action is over in the private/class action arena. SafeMoon attracted the most attention after it was hit with a class-action lawsuit for allegedly running a pump and dump scheme.

According to the class action, the project was accused of recruiting many celebrities to attract investors with misleading information. Musicians such as Nick Carter and Soulja Boy, Lil Yachty, and YouTubers Jake Paul, Jake Phillips, all claimed to have promoted the BNB Chain-based token.

One case that has largely slipped under the radar is Halston Thayer v. Matt Furie. Chain/Saw LL and PegzDAO starting in March.

Furie, the creator of the Pepe the Frog meme, is being accused of fraudulent inducement after allegedly selling one-of-one NFTs that dropped in value due to an identical NFT drop that was free.

Plaintiff claims that defendants falsely represented the value of a Pepe the Frog NFT. Plaintiff paid $537 084 for a Pepe the Frog NFT, created by Furie, and sold through PegzDAO. PegzDAO released 46 NFTs identical to Plaintiff’s, just a few weeks after the sale,” Morrison Cohen wrote.

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