SEC Loses Bid for One Crypto Case as Litigation Splits Across Three Federal Courts
SEC Loses Coordination Battle Over Crypto Cases
Three separate lawsuits targeting the same crypto firm just got the green light to stay scattered across three different federal courts. The Judicial Panel on Multidistrict Litigation rejected Anthony Motto’s push to consolidate the cases in Chicago, leaving the actions split between Illinois, California, and Pennsylvania. The decision hands plaintiffs local control but keeps the SEC’s enforcement playbook fragmented and expensive.
The suits all accuse the same digital-asset platform of selling unregistered securities, but each case is brought by different retail investors in different states. Motto argued that centralizing the three actions would cut duplicative discovery and produce one consistent set of rulings. Opposing counsel pushed back, claiming the cases are small, fact-specific, and not numerous enough to justify the administrative burden of a multidistrict docket. The Panel agreed, finding that the handful of actions did not meet the statutory threshold for forced coordination.
Judges can still informally share discovery or hold joint status conferences, but there will be no single presiding judge and no unified pretrial schedule. Each district keeps its own calendar, its own evidentiary rules, and its own potential jury pool. That means three separate judges could reach three separate conclusions on whether the tokens at issue are securities, leaving the legal status of the same crypto asset uncertain from coast to coast.
In practical terms, the ruling keeps the SEC’s courtroom advantage intact: the agency can litigate in friendly districts without worrying that a single skeptical judge will set nationwide precedent. It also raises the cost for defendants, who must now fight identical claims on three fronts instead of one. For traders and exchanges watching the docket, the message is clear—fragmented litigation equals prolonged uncertainty around token classification and enforcement risk.
The split-screen approach may embolden more plaintiffs to file copycat suits in their home courts, betting that at least one judge will deliver a plaintiff-friendly ruling before the SEC can lock down a national standard.
