On April 3, 2020, exactly one year after the Securities and Exchange Commission (SEC) issued its “Framework for ‘Investment Contracts’ Analysis of Digital Assets” (Framework), 11 class action lawsuits were filed in the Southern District of New York by two law firms representing various combinations of four proposed lead plaintiffs. The lawsuits all name as defendants companies and affiliated individuals involved in creating blockchain networks and platforms for various business activities that either distributed blockchain-based cryptographic assets (tokens) in initial coin offerings (ICOs) or operated trading platforms (exchanges) for the purchase and exchange of such tokens. The 11 complaints rely on the same essential legal theories—that the original token sales were unregistered securities offerings and the exchanges that facilitated secondary token sales were unlicensed securities dealers. In this article, the authors analyze these claims and discuss some of the potential defenses to them.

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