Venture capital firm the Digital Currency Group (DCG) and its CEO Barry Silbert have requested to consolidate two class-action lawsuits over alleged losses during the crypto winter.
In a letter sent to United States District Judge Stefan Underhill in Connecticut, the defendants argued that both cases “arise from the same facts, present overlapping legal issues and propose nearly identical class definitions.”
The defendants also argued that consolidating the cases would be necessary to avoid conflicting decisions and promote judicial efficiency. In the letter, the defendants informed Underhill that they had asked U.S. District Judge Lewis Liman to transfer the case from New York to Connecticut. The letter stated:
“The motion will be fully briefed no later than June 13, 2023, and, if Judge Liman grants the motion to transfer to this Court, Defendants intend to quickly move to consolidate both actions.”
Within the letter, the plaintiffs in Connecticut contested the move, arguing that it’s premature to decide before the case in New York gets approved for transfer. They are also expecting the plaintiffs in New York to oppose the transfer because there is a lot of uncertainty in the nature and scope of the claims.
The lawsuit in Connecticut alleges that Silbert orchestrated a misleading transaction to conceal signs of a $1.1 billion implosion after Three Arrows Capital (3AC) started liquidation proceedings. The defendants face allegations of committing securities fraud for making misleading or false statements.
Amid the ongoing suits, DCG has decided to close its prime brokerage subsidiary TradeBlock. According to the firm, the decision stems from the state of the broader economy and the uncertain regulatory environment for crypto in the United States. TradeBlock officially started the process of closing down on May 31.