A Manhattan federal judge has dismissed a securities fraud class action against Bancor after ruling that the plaintiff’s allegations were not enough to give the court jurisdiction. According to a report, the dismissal of the case against represents the first such ruling “in a suite of similar cases filed by crypto investors represented by Selendy & Gay and Roche Cyrulnik.”
US Courts Have no Jurisdiction
In their motion against Bancor, which has offices in Switzerland and Israel, the plaintiffs led by Timothy Holsworth, had argued that the protocol’s “BNT token is a security and thus falls under U.S Securities law.” In addition, the plaintiffs also alleged that Bancor had “made numerous false statements and omissions that led reasonable investors to conclude that the BNT tokens were not securities.”
However, in their defense, Bancor countered by arguing that a U.S. trial would be “inappropriate due to the company’s international and geographical nature.” According to a report, Bprotocol Foundation is incorporated under Swiss law and the organization has offices in Zug, Switzerland, and Tel Aviv, Israel. Additionally, the four founders of Bancor live in Israel.
US Investors Versus Non-US Token Issuers
Meanwhile, in their submission, the plaintiffs had insisted the 587 BNT tokens purchased on 4 September 2019 by one Wisconsin resident, William Zhang gave U.S. courts jurisdiction. Zhang, who initially filed the lawsuit, bought the tokens valued at $212.50 on Coss, a digital exchange based in Singapore. However, in dismissing the case, the US judge Alvin Hellerstein said:
Wherever the current business location of Bancor, New York is not a reasonable and convenient place to conduct this litigation.
In addition to the lawsuit against Bancor, the plaintiffs have filed motions against issuers of EOS, TRX, KNC, and OMG. Centralized exchanges based outside the U.S. like Binance and Kucoin are also included in the lawsuit.
What are your thoughts on this ruling by a U.S. judge? You can share your views in the comments section below.
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