HelbizCoin Litigation Lives On: Second Circuit Declines to Apply ‘Morrison’ to Dismiss State Common Law Claims

Haima Marlier, Jamie Levitt, and Justin Young authored an article for New York Law Journal about the Second Circuit breathing life back into the ‘Helbiz’ cryptocurrency.

“The Second Circuit weighed in this month that the Supreme Court’s presumption against the extraterritorial application of the federal securities laws, as announced in Morrison v. National Australia Bank Ltd., cannot be used to toss state law common law claims, even if they arise in connection with an allegedly fraudulent initial coin offering [ICO],” the authors wrote. “Barron v. Helbiz presented the Second Circuit with a unique opportunity to consider the apparently sua sponte application of Morrison by Judge Louis Stanton of the U.S. District Court of the Southern District of New York to dismiss common law claims that sounded in fraud. The plaintiffs in Helbiz claimed they were deceived into purchasing cryptocurrency as part of the company’s ‘pump and dump’ investment scheme, but did not allege violations of the federal securities laws. In a unanimous opinion, Judges Debra Ann Livingston, Denny Chin, and William Nardini breathed life back into Helbiz, vacating the district court’s judgment and allowing plaintiffs to amend their complaint to satisfy the jurisdictional requirements from Morrison by adding a claim under §10(b) of the Securities Exchange Act of 1934.”

Read the full article.