Kyle W. Roche partner with Roche Cyrulnik Freedman and Philippe Selendy founding partner of Selendy & Gay.

As spin-offs from Big Law litigation powerhouses, Selendy & Gay—which split from Quinn Emanuel Urquhart & Sullivan in 2018—and Roche Cyrulnik Freedman—newly launched with talent pulled largely from Boies Schiller Flexner—have a lot in common.

Both boutiques are staffed with highly-credentialed lawyers who embrace alternative fees and aren't afraid to tackle enormous, complicated cases—whether on the side of plaintiffs or defendants.

It seems fitting then that they've collaborated to bring 11 class actions seeking billions of dollars from the world's largest crypto-asset exchanges and major digital token issuers.

In suits filed Friday in U.S. District Court for the Southern District of New York, they allege that the defendants sold billions of dollars of unregistered digital tokens and other financial instruments to investors in violation of federal and state securities laws.

"[T]he vast majority of these new tokens turned out to be empty promises. They were not 'better,' 'faster,' 'cheaper,' 'more connected,' 'more trustworthy,' or 'more secure' than what existed in the marketplace," one complaint states. "In reality, they often had no utility at all. The promises of new products and markets went unfulfilled, with the networks never fully developed, while investors were left holding the bag when these tokens crashed. Indeed, all of the Tokens are now trading at a tiny fraction of their 2017–2018 highs."

The suits were filed against crypto-asset exchanges Binance, Bibox, BitMEX and KuCoin, as well as seven issuers of digital tokens:  Block.one (EOS), Tron (TRX), Bancor (BNT), Civic (CVC), Kybercoin (KNC), Quantstamp (QSP), and Status (SNT), in addition to numerous company executives.

Roche Cyrulnik founding partner Kyle Roche has quickly made a name as a subject matter expert in cryptocurrencies and blockchain.  

For example, he and his 19-lawyer firm currently represent the estate of David Kleiman in a fight against the self-described creator of Bitcoin, Craig Wright, in an action to recover $11 billion in stolen bitcoins and blockchain-related intellectual property rights. The suit is slated for trial later this year in Miami federal court.

Selendy, a name partner at 45-lawyer Selendy & Gay, is more of a generalist, with a record of landing huge payouts—more than $25 billion for the Federal Housing Finance Agency (and U.S. taxpayers) in a series of mortgage-backed securities suits against major financial institutions after the 2007-2008 financial crisis. 

For the two firms, there's a synergy in collaboration, Roche said, and a shared willingness to take on "high level, creative work in an area that most plaintiffs law firms would not venture into."

Selendy added, "We have a shared commitment to a very egalitarian, collegial and collaborative work style." 

It's actually their second time joining forces. In February, the two firms were appointed interim class counsel (beating out firms including Robbins Geller Rudman & Dowd) by U.S. District Judge Katherine Polk Failla in a first-of-its-kind cryptocurrency class action in the Southern District of New York. 

In that suit, they represent consumers asserting Commodities Exchange Act, federal antitrust and RICO claims against a group of defendants for manipulation of the cryptocurrency market. According to the complaint, liability to the putative class likely surpasses $1.4 trillion.

The bridge between the firms is Roche co-chair Ted Normand. He and Selendy litigated a class action together when both worked at Boies Schiller. (Selendy was a Boies Schiller partner from 2000 to 2006, but left for Quinn Emanuel before Roche arrived at Boies Schiller in 2015.)

Selendy describes the 11 new class actions as a "broadside against unregistered participants in the crypto space" who are allegedly taking advantage of investors by failing to provide the kind of robust disclosures required by the U.S. Securities and Exchange Commission for initial offerings. 

"Instead, these [initial coin offerings] were the 'Wild West'—with investors left to fend for themselves," a complaint states. "Without the mandatory disclosures that would have been required had these ICOs been properly registered with the SEC, investors could not reliably assess the representations made or the risks of their investments."

So why hasn't the SEC cracked down? 

Roche notes that the SEC has in fact brought some enforcement actions. In September of 2019, for example, blockchain technology company Block.one agreed to pay a $24 million civil penalty for conducting an unregistered initial coin offering (or ICO) of digital tokens.

But there have been about 800 ICOs, Roche said, with more than $20 billion raised—which is a lot for the agency alone to handle. "The scope and complexity are historically unique," he said. And that's where the securities laws' private right of action comes in.

"The purpose of the right of action is to curtail these types of violations," he said "and to leverage our own expertise and analysis."