US judge dismisses crypto fraud case against BNT token issuer

A federal district court in the United States has dismissed a securities fraud class action against Israel-based cryptocurrency firm Bancor.

U.S. district judge Alvin Hellerstein ruled on Monday to dismiss a case against Bancor, stating that plaintiffs had failed to allege losses as well as citing lack of personal jurisdiction. The judge has also canceled an oral argument scheduled for March 4, 2021, entering judgment in favor of the defendants.

The case was brought by New York law firms Roche Cyrulnik Freedman and Selendy & Gay in April 2020, alleging that the Bancor protocol developer, BProtocol Foundation, violated federal and state securities laws in the U.S. by selling unregistered securities.

According to a filing seen by Cointelegraph, the court found that activities promoting the BNT token were not sufficient to give the court jurisdiction over the BProtocol Foundation. “The Court lacks personal or specific jurisdiction over the Defendants, and the case should be dismissed because of forum non conveniens,” the document reads.

The filing mentions that the BProtocol Foundation is operating under the law of Switzerland, with offices in Zug and Israel. The case’s plaintiff, Timothy Holsworth, alleged that he purchased 587 BNT tokens in 2019 from Wisconsin via a digital exchange in Singapore at an aggregate cost of $212.50. Despite Holsworth allegedly being able to buy BNT tokens from the U.S., the judge stated that the jurisdiction is not appropriate:

“The federal securities laws do not reach a purchase and sale outside the United States [...] Wherever the current business location of Bancor, New York is not a reasonable and convenient place to conduct this litigation.”

The judge also stated that Holsworth has failed to provide evidence that BNT coins declined in value. Furthermore, the plaintiff did not plausibly allege that the tokens were purchased from Bancor or in connection with its $153 million initial coin offering completed in June 2017. 

The latest court decision marks the latest ruling in a series of similar cases filed by investors represented by Roche Cyrulnik Freedman and Selendy & Gay. As previously reported by Cointelegraph, the law firms also represent similar filings against the world’s largest crypto exchange Binance, BitMEX, KuCoin, Block.one and others.

The firm is also involved in the lawsuit against Craig Wright, a self-proclaimed creator of Bitcoin (BTC), representing the estate of Ira Kleiman. The estate seeks 50% of Wright’s $1.1 million Bitcoin fortune, which the claimant argues rightfully belongs to them.