In the Gazette, Daniel Alter writes about a class action lawsuit involving a Dublin-based cloud services reseller.
Class action
In June, a class action was filed in the US federal district court in the State of Pennsylvania against Cloud With Me Ltd (Cloud), a Dublin-based reseller of internet cloud services.
According to the complaint, Cloud violated US securities law by selling digital tokens in support of its start-up business through an initial coin offering, or ICO. The complaint alleges that Cloud is guilty under US law of illegally selling unregistered securities and seeks millions of dollars in monetary relief for all token purchasers.
Implications for crypto-assets
Whether a US court has jurisdiction to haul Cloud from Dublin to Pittsburgh to litigate American securities claims remains to be seen. Daniel Alter, a shareholder in the New York Office of Murphy & McGonigle PC and former general counsel for the New York State Department of Financial Services, writes that the allegations in the complaint “are notably thin”.
Given the international market for crypto-assets, however, and specifically the explosive growth of ‘fintech’ industries in Ireland, a US case will, doubtless, someday arise, implicating Irish entrepreneurs or investors. In this context, it is important to stay abreast of the evolving US regulatory standards governing crypto-assets. As Alter notes, this is easier said than done.
The US federal system of government has sired a complicated and at times conflicting regulatory structure. There are several financial regulators on the national level that have claimed direct authority over different categories of crypto-assets. Writing in the Gazette, Alter sets out the emerging regulatory environment, and looks towards possible future developments.
Archive and subscribe
For current and past issues of the magazine, visit the online Gazette.
To have future issues delivered to your home or office, subscribe today.