Roche Freedman LLP, the law firm representing Ira Kleiman in his lawsuit against Dr. Craig Wright, have withdrawn five lawsuits which they originally filed against a selection of digital asset companies, principally accusing them of offering unregistered securities.
The lawsuits are five of 11 class action suits that were jointly filed by Roche Freedman LLP and Selendy & Gay last April. Though the specifics of each complaint differ, the consistent thread is that the defendant companies all offered tokens which amounted to securities and therefore should have complied with the U.S. Securities and Exchange Commission’s (SEC) rigorous rules surrounding the offering of securities.
The withdrawals of the five cases were presumably due to the dismissal of two of the other original cases earlier this year.
One of those, against Bibox, was dismissed in April on the basis that the plaintiff had no standing to sue in respect of tokens offered by the defendant but which he himself had not purchased. The only coin the plaintiff had purchased was done so 16 months before the filing of the suit, exceeding a 12-month limitation period for bringing securities violations.
The other, against BProtocol Foundation, was dismissed for similar reasons.
Defense counsel in all five of the most recently dismissed cases had since seized upon the Bibox ruling in their filings, while four of the five had cited the BProtocol ruling. As in those two cases, the period in which the plaintiffs are said to have purchased the relevant tokens in the five that were dismissed took place between 2017 and 2018.
Though the timing may suggest the Bibox and BProtocol dismissals were influential on Roche Freedman et al’s decision to withdraw the other five, the readiness with which the lawsuits were abandoned does invite some speculation. After all, when the 11 suits were filed in April 2020, they were accompanied by a PR campaign which suggested the lawsuits would usher in a ‘new era’ of crypto litigation.
You might ask what has changed, and the answer could simply be that the Bibox and BProtocol rulings made pursuing cases with similar facts was deemed to be unviable.
However, something else has changed since the original lawsuits were filed by Roche Cyrulnik Freedman LLP: named partner Cyrulnik was unceremoniously ousted from the firm by his co-partners in February of this year for, among other things, being allegedly abusive toward his colleagues and obstructing the provision of client services. Now, Cyrulnik and the partners left behind are suing one another. Cyrulnik claims that this was a pretense to gain control of his share of compensation (in the form of digital assets) arising from work the firm was doing for a digital asset client. The firm now goes by Roche Freedman LLP, and it was under this name that the lawsuits were withdrawn this week.
The firm also represents Ira Kleiman in the Kleiman v Wright litigation, which was delayed this week at the request of both parties despite being on the books for June since November of last year. The principle reason for the delay was due to COVID-19-related travel restrictions, though a busy docket for Freedman was cited as a reason for pushing the trial as far out as November. Though no trial date has been set for the Cyrulnik fiasco, court filings show that an initial conference between the parties and the Judge in the case is set for May 13, so it can be expected that this dispute will be litigated throughout this year and beyond.
That these lawsuits were withdrawn little more than a year after they were announced is disappointing. There is undoubtedly a need for long-standing illegal practices in the digital asset industry to be brought to an end, be that through private litigation or criminal enforcement action. However, given all that Roche Freedman LLP seem to have on their plate this year, perhaps it’s for the best.
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