The collapse of many crypto firms in 2022 increased regulatory attention on the industry. Some recent enforcement actions by regulators affected vital activities such as stablecoin issuing and staking services, of which Paxon, Binance, and Kraken have been affected.
Coinbase has also faced a series of issues with the SEC due to compliance-related accusations and a recent battle against regulatory policies affecting the industry.
While the crypto community is still reeling from these regulatory actions, top securities attorneys have launched yet another investigation into Coinbase, Robinhood, and other exchanges on behalf of investors. The investigation centers on possible violations of federal and state law violations and failure to provide adequate material risk disclosures to crypto investors.
A Possible Class Action Suit Against Top Exchanges
CryptoLawyers.org is the law firm carrying out the investigation against the exchanges on behalf of their users. Two securities and investment fraud attorneys Tom Grady and his partner Guy Burns are spearheading the investigation to determine if Coinbase, Robinhood, and others failed to comply with the laid-down rules governing the provision of crypto services.
Fox Business reported this recent development revealing Grady’s statement that these exchanges could face a class-action lawsuit. Tom Grady also stated in the press release that they believe the exchanges have violated the laws guiding their operations. As such, customers who lost money while transacting on the platforms may be entitled to get their funds back.
The law firm contacts the customers of these top exchanges and others, asking them to join the fight. Investors who lost funds transacting on these exchanges are to share their investment information for the lawyers to evaluate and determine if their claims meet the criteria to file for the case.
What This Investigation Means For The Crypto Industry
Tom Grady’s activities so far in securities law have made him a popular figure in the industry. The famous investment fraud attorney has always represented and helped retail investors who lost money to Wall Street firms to recover their funds.
Regarding crypto, Grady believes that many crypto tokens are unregistered securities, and exchanges offering them to customers violate state and federal laws.
Tom Grady and his partner Guy Burns have been renowned for their success in securities and financial litigations for over 40 years. As such, this recent interest in digital assets will likely raise a lot of dust for many firms.
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According to the Fox Business report, many class action suits have yet to emerge in the industry as investors see digital assets as currencies, not securities. But with this potential litigation, digital asset firms might face more lawsuits as the debate about crypto classification continues to rage.
Featured image from Pixabay and chart from Tradingview.com