By Amie Parnaby
“Have you bought into an ICO in the past 3 years? Were you disappointed with the result? No win, No Fee…”
Have you ever heard “Have you had an accident in the past 3 years? No win, No Fee…” on a TV or radio advertisement? With the recent rash of civil lawsuits and class-action suits against some of the biggest cryptocurrency providers, I can’t help but feel it could soon change to “Have you bought into an ICO in the past 3 years…?”
It sounds silly, and maybe it is a little, but it’s not that far from the truth. With the number of people who bought into the crypto-craze that happened in 2017, investing in ICO’s without thorough research, and losing out when the bubble burst in late December.
This is only the beginning
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There are a lot of people out there that bought into ICOs using Bitcoin or Ether and then sold at a loss when they didn’t get the return on their investment that they expected.
While a lot of people would probably think along the lines of “You sold too early” or “You didn’t do your research”, the litigation lawyers are making the most of ICOs that are operating in the grey area of financial law. In truth, the area is only grey because the cryptocurrency market is so new that no one has really thought to review these 80-year-old laws to reflect the current digital climate.
The majority of recent lawsuits have occurred in the U.S. (not really surprising), but there have been others in Norway (which they lost) and Australia. Unfortunately for the coin producing companies, there are set to be several more.
The recent class-action lawsuit served to Ripple means that the civil litigation lawyers are upping their game to the major leagues of cryptocurrency.
There will be a point when the number of civil cases won or lost will determine what the law-makers do to bring cryptocurrency into the fold of regulation. Will they try to make them fit the old pre-tech laws or will new ones be created? Whichever way it goes the effect will trickle down through the crypto community, affecting everything as it goes.
Not all bad news
The fact that most of the cases raised have been in the U.S. makes a difference. While there have been reports of financial litigation firms making lists of ICO’s to sue, their interest lies entirely on what they will get back from it. Much like the “No win, No Fee” personal injury lawyers, these financial litigation experts will recoup much of their costs from the ICOs they sue, plus a whole lot more to swell their coffers.
One of these lawyers, David Silver, has gone on record saying:
“I said into a camera that I planned on filing 30 (class actions against ICOs) in 30 days.”
He’s since retracted that number because there is less likelihood of suing and collecting from ICOs not based in the U.S. Consequently, there is less value in suing. There are significantly more non-U.S. based and registered ICOs than U.S. based. As a result, the trickle-down effect will have more impact on the U.S. based companies that had an initial ICO than those in other countries.
This is bad news for ICOs based in or strongly linked to the U.S. (they make perfect targets), but it is better news for all the rest. Assuming of course that the rest of the world doesn’t take its lead from America.
There is a shift happening already, with companies postponing their ICO’s until legislation is settled and moving their businesses away from the U.S., due to the litigious culture inherent there.
About the Author:
Amie Parnaby is a professional writer with an experience in a broad range of industries, from I.T to training, from optics to banking. Within these settings, Amie has provided quality web content, training materials and technical documentation. She is currently an in-house Content Writer at Leverate.