Court Panel Denies Bid to Bundle Crypto Class Actions
A federal judicial panel has refused to merge three separate investor lawsuits against crypto platforms into one nationwide proceeding, leaving each case to play out in its own district. The decision keeps litigation fragmented, preserving different judges’ approaches to whether tokens are securities, commodities, or something else entirely. Markets will now watch how divergent rulings ripple through trading desks and compliance departments.
Plaintiff Anthony Motto filed in Chicago’s federal court claiming unregistered offerings and market manipulation by several exchanges and token issuers. Two copycat suits followed—one in Los Angeles and one in Philadelphia—prompting Motto to ask the Judicial Panel on Multidistrict Litigation to gather them under a single judge for pretrial efficiency. The panel reviewed the filings and heard arguments that common questions of token classification and disclosure duties justified consolidation.
Judges on the panel ruled that the cases, while thematically similar, lacked the factual overlap and discovery burden needed for forced merger. They noted differing defendants, trading pairs, and state-law claims that could confuse rather than streamline proceedings. Chicago keeps Greene, California keeps its action, and Pennsylvania retains its own; none gains the procedural leverage of an MDL.
In plain terms, the order signals that crypto litigation will stay localized until a critical mass of identical facts emerges. Plaintiffs must now litigate disclosure standards and commodity definitions in three separate courtrooms, raising costs and stretching timelines.
The ruling subtly shifts power back to individual districts, allowing judges to test the boundaries of SEC and CFTC authority without a single precedent locking in national policy. Exchanges and DeFi protocols gain breathing room to argue that tokens function more like commodities in some jurisdictions and securities in others, potentially fueling a patchwork of compliance regimes. Traders may see continued volatility as each verdict leaks into pricing models and risk desks.
For platforms and investors alike, the message is clear: until Congress or a higher court imposes uniformity, legal outcomes will vary by zip code—and so will the price of regulatory risk.