Court Rejects MDL Bid, Keeps Three Crypto Suits Fragmented Across Illinois, California and Pennsylvania

COURT REJECTS MDL BID FOR THREE CRYPTO SUITS

Plaintiff Anthony Motto asked a federal panel to bundle three separate lawsuits against a crypto exchange into a single proceeding in Chicago. The Judicial Panel on Multidistrict Litigation said no, leaving the cases to proceed on their own dockets in Illinois, California, and Pennsylvania. The decision keeps the litigation scattered and raises the cost and complexity for both plaintiffs and the exchange.

The suits accuse the exchange of selling unregistered securities, mishandling customer funds, and violating state consumer-protection laws. Motto argued that common questions of fact—chiefly whether the tokens at issue qualify as securities and whether the platform operated as an unregistered broker—made centralization efficient. Judges in California and Pennsylvania had already denied similar coordination requests, and the panel agreed that the factual overlap was not substantial enough to justify forcing the cases together.

The panel’s short order leaves each district free to set its own schedule, discovery limits, and settlement pressure. Plaintiffs in different states now face the prospect of duplicative document requests and inconsistent rulings on whether the tokens are commodities or securities. The exchange, meanwhile, avoids the streamlined discovery and single settlement forum that an MDL would have created, but also escapes the risk of one adverse nationwide ruling.

In plain terms, the court decided that three cases do not yet look enough alike to be treated as one. That keeps the legal risk fragmented and makes it harder for either side to force a quick, global resolution.

For crypto markets the ruling signals that the SEC’s enforcement theory—treating many tokens as securities—will be tested in multiple courts rather than one. Plaintiffs cannot pool resources as easily, which slows momentum for broad liability findings, yet the exchange must still defend overlapping claims in three venues, raising legal spend and settlement uncertainty. Traders will watch whether any single district produces a clear precedent on token classification that could ripple to other platforms and DeFi protocols.

Fragmented litigation means slower regulatory clarity and continued pricing pressure on tokens whose legal status remains contested.