Crypto Class Actions Stay Split as MDL Panel Denies Consolidation
Court Blocks Crypto Class Action Consolidation Bid
Three separate investor suits against crypto exchanges and token issuers will remain in their home courts after a federal panel refused to merge them. The ruling keeps each case on its own track and denies plaintiffs the chance to build one massive discovery machine that could pressure defendants into a nationwide settlement. For the industry, the decision preserves fragmentation and raises the cost of fighting multiple fronts at once.
The motion came from Anthony Motto, lead plaintiff in Greene v. Coinbase, filed in Chicago. He asked the Judicial Panel on Multidistrict Litigation to pull in two other investor class actions—one in Los Angeles and one in Philadelphia—that also accuse exchanges and token creators of selling unregistered securities. Motto argued that common questions about whether certain tokens are securities, how exchanges facilitate sales, and what disclosures were required justified a single proceeding. Defendants countered that the cases involve different platforms, tokens, and state-law claims, making overlap minimal and consolidation inefficient.
Judges on the Panel sided with defendants. They found the actions too distinct in parties, products, and legal theories to warrant transfer. The panel noted that the core legal question—whether the tokens qualify as securities under the Howey test—does not automatically create enough factual overlap to justify centralization. Each court will now handle its own discovery, class-certification fights, and potential motions to dismiss.
In plain terms, the ruling keeps three lawsuits alive in three different districts instead of funneling them into one Chicago courtroom. Plaintiffs lose the leverage of pooled resources and coordinated pressure, while exchanges and token issuers avoid the risk of a single adverse ruling that could ripple across the country. The decision signals that courts remain reluctant to treat every token dispute as part of one giant regulatory fight.
The outcome tilts power toward defendants and slows any momentum toward a sweeping precedent on token classification. Without consolidation, the SEC and CFTC lose a ready-made vehicle for nationwide discovery that could have clarified commodities-versus-securities boundaries. Exchanges gain breathing room to litigate on narrower grounds, and DeFi protocols stay shielded from a single discovery order that might expose wallet data or liquidity-provider identities. Traders and liquidity providers, however, face higher legal costs and slower clarity on whether their tokens could trigger liability.
Fragmented litigation means slower, costlier precedent and keeps regulatory risk high for platforms that list tokens still hovering in the gray zone between commodity and security.
