Crypto Suits Stay Split as Court Denies Centralization Bid

COURT REJECTS BID TO CENTRALIZE CRYPTO SUITS

Three related investor suits against digital-asset firms will stay in separate courts after a federal panel refused to consolidate them. The decision keeps litigation fragmented, raises defense costs for exchanges, and leaves open the possibility of conflicting rulings on whether tokens qualify as securities—an issue that could ripple through every trading desk and DeFi protocol.

Anthony Motto, lead plaintiff in the Illinois case Greene v. digital-asset defendants, asked the Judicial Panel on Multidistrict Litigation to gather all three actions before a single judge in Chicago. The other two suits sit in California and Pennsylvania, each alleging unregistered offerings of tokens that plaintiffs claim are securities. Motto argued that common questions of law and fact made centralization efficient and fair. The panel, chaired by Judge Sarah S. Vance, disagreed.

Judges found that the three cases involve different tokens, different issuers, and different factual records, making a single proceeding unwieldy. They noted that discovery and legal theories would likely diverge, and that any efficiencies from consolidation would be outweighed by the inconvenience of forcing parties, witnesses, and documents into one distant forum. The motion was denied without dissent.

The ruling leaves each district court free to interpret Howey and related precedents on its own timetable. Plaintiffs can now press for class certification and summary judgment in three separate venues, while defendants face the expense of parallel litigation and the risk that one adverse ruling becomes persuasive authority elsewhere.

For crypto markets the decision tilts power toward plaintiffs and away from a unified defense. Without MDL coordination, the SEC and CFTC watch overlapping dockets that could produce inconsistent signals on token classification, stablecoin treatment, and exchange liability. Traders and protocols must price in the chance that a single unfavorable opinion in Illinois, California, or Pennsylvania becomes a precedent that chills liquidity or forces costly restructuring of token sales.

Decentralization wins a round, but legal fragmentation just raised everyone’s premium.