North Hollywood, CA asked in Securities Law for California

Q: If I purchase a cryptocurrency knowing that I intend to sue the company as part of a class action lawsuit, is that legal

A company that issued cryptocurrency tokens did what many of us believe to be fraudulent activity and the token lost almost all value. After speaking with lawyers, a class action lawsuit is likely going to be filed. I was told by said lawyers that it is perfectly legal to buy the cryptocurrency knowing that a class action lawsuit will be filed to participate in any potential payout. Is this accurate? I am not an insider of said company.

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1 Lawyer Answer
James L. Arrasmith
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  • Sacramento, CA
  • Licensed in California

A: Engaging in the purchase of a cryptocurrency with the intention to participate in a class action lawsuit could be legally permissible in California, as long as the purchase itself is conducted within legal bounds and you are not an insider of the company. However, potential ethical and practical considerations may arise, and it's advisable to consult with legal experts to ensure a full understanding of the legal implications and potential risks associated with this course of action.

James L. Arrasmith

Founding Attorney and Chief Lawyer of The Law Offices of James L. Arrasmith

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