N.Y. judge kills crypto investors' class settlement with Block.one

N.Y. judge kills crypto investors’ class settlement with Block.one

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– The proposed $27.5 million settlement in the Block.one class action has been rejected by U.S. District Judge Lewis Kaplan.

– The judge ruled that the lead plaintiff in the class action, Crypto Assets Opportunity Fund LLC, could not adequately represent the interests of investors whose transactions took place in the U.S.

– Block.one is a Cayman Islands-based blockchain company that allegedly sold unregistered securities in a 2017 offering to raise capital to develop its platform and that the company subsequently deceived tokenholders about how the blockchain operated.

– The lead plaintiff in the class action, Crypto Assets Opportunity Fund LLC, had requested $5.5 million in fees, which the judge denied.

– In the Block.one case, the judge did not issue a ruling on the merits of the companys dismissal motion. Instead, Kaplan denied the motion without prejudice after the two sides reached a proposed settlement in June 2021, noting that Block.one could revive the motion if he rejected the deal.

– Kaplan remained concerned, however, about Morrison extraterritoriality issues.

– In a follow-up letter brief, Grant & Eisenhofer said that nearly half of the funds trades in Block.one tokens took place on what the SEC would define as a U.S. crypto exchange.

– The judge said that the settlements plan for allocating relief to investors did not account for differences in the strength of their claims based on Morrison considerations.

 

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