O’Hagan Meyer Secures Complete Dismissal of Federal Crypto Securities Action
O’Hagan Meyer partner Elizabeth Del Cid and associate Arian Hashemi secured a significant victory on behalf of their clients when the United States District Court for the Southern District of New York granted Defendants’ motion to dismiss in a cryptocurrency token compensation dispute and closed the case.
The lawsuit arose from a dispute involving compensation paid in cryptocurrency tokens related to a blockchain gaming project. Plaintiffs asserted federal securities fraud claims under Section 10(b) of the Securities Exchange Act and Rule 10b-5, along with several state-law claims, alleging that the Defendants redirected resources into a separate gaming project, diminishing the value of the cryptocurrency that was at the center of the dispute.
Representing the Defendants, O’Hagan Meyer successfully moved to dismiss the Plaintiffs’ federal securities claims. In granting the motion, the Court concluded that the alleged transaction was not a domestic securities transaction and was too foreign in nature to be governed by U.S. federal securities laws. The Court dismissed the federal securities claims against the Defendants with prejudice and found that any additional amendment would be futile.
The Court separately dismissed claims against one of the Defendants, which Plaintiffs sought to link to another Defendant, on forum non conveniens grounds. The Court also rejected Plaintiffs’ alter ego theory and declined to exercise supplemental jurisdiction over the remaining state-law claims. As a result, the federal action was dismissed in its entirety, all pending deadlines were terminated, and the clerk was directed to close the case.
The decision delivered a significant victory for the Defendants, resulting in the complete dismissal of the federal action and bringing the matter to a close.
Commenting on the result, O’Hagan Meyer’s New York City Managing Partner Elizabeth Del Cid stated:
“This victory in the Wild West of crypto token law is due in large to Arian Hashemi’s phenomenal advocacy and laser focus on regulatory interpretation of securities and crypto law. This is a radically evolving area of law that few attorneys take the time to understand as well as Arian.”
