USA – NEW YORK Trends and Developments Contributed by: Sam Lieberman, Ben Hutman and Claiborne Hane, Sadis & Goldberg LLP
Williams et al. v Binance et al., 20-CV-2803 (S.D.N.Y., appeal decided Mar. 8, 2024) The Second Circuit reinstated claims under Section 12 (a)(1) of the Securities Act of 1933 against the Binance digital assets trading platform for engaging in the unregistered offering of several digital assets that are allegedly securities. The court also reinstated claims under Section 29 (b) of the Exchange Act of 1934 to rescind the class’s contracts with Binance to trade in digital assets, such that the class’s losses would be rescinded and unwound and paid back to them. If successful, this class action could impose hundreds of millions of dollars of liability on Binance.
These are several of the class actions focused on hacking digital assets and the unregistered sales of digital assets as securities filed in recent years in New York. As digital assets gain in popularity, more of these class actions should be expected. For example, losses from the hacking of digital assets surged to a record $2.2 billion in 2024, according to Chainalysis – not including the Coinbase hack that is the focus of the class action above. Accordingly, more of these class actions will be seen in the future.
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