The year 2025 was a busy one for crypto class action litigation.
It saw several significant court rulings that continued to shape the law in this growing area, including important decisions on motions to compel arbitration, dispositive motions and motions for class certification. Several multimillion-dollar settlements were reached.[1]
In addition, dozens of new crypto class action cases were filed, auguring continued growth and development in this area.
Arbitration Agreements
The U.S. District Court for the Northern District of California, in the cases of Carolus v. Coinbase Global Inc., and Cordero v. Coinbase Inc., twice upheld, including in August in the Cordero matter, Coinbase's modern arbitration agreement against a series of challenges based on arguments regarding lack of mutual assent, unconscionability, lack of due process and improper incorporation of the American Arbitration Association's supplemental rules on mass arbitration.[2]
Distinguishing the crypto exchange's arbitration agreement from a modern arbitration agreement recently held unconscionable in Heckman v. Live Nation Entertainment Inc., in which the U.S. Supreme Court denied certiorari in October, the court found this modern arbitration agreement enforceable because it was executed via scroll wrap and provided class action waivers and batched arbitrations with no bellwether or representative proceedings to bind absent parties.
These cases provide a road map for corporate counsel designing arbitration agreements in the crypto industry, particularly in California, a difficult jurisdiction in which to move to compel arbitration.[3]
Motions To Compel Arbitration
By contrast, several other cases decided by federal courts this year denied crypto class action defendants' motions to compel arbitration on other instructive grounds.
Two rulings — the U.S. Court of Appeals for the Ninth Circuit's October decision in Houghton v. Polychain Alchemy, and the U.S. District Court for the Northern District of California's September decision in Samuels v. Lido DAO — found waiver of any right to arbitrate due to not raising the motion to arbitrate until after litigating the case for a substantial number of months.[4]
Houghton and another ruling — the Ninth Circuit's October decision in Young v. Solana Labs Inc. — also found no agreement to arbitrate by finding that a defendant cannot invoke principles of equitable estoppel to compel crypto-asset purchasers to arbitration pursuant to an arbitration agreement the defendant did not sign.
The Ninth Circuit noted in both cases, however, that principles of equitable estoppel could occur in other situations where the claims raised by the class action plaintiffs are intertwined with the agreement containing the arbitration provision.[5]
Dispositive Motions
On dispositive motions, courts in the Second Circuit — particularly the U.S. Court of Appeals for the Second Circuit itself in Risley v. Universal Navigation Inc., and the U.S. District Court for the Southern District of New York in Underwood v. Coinbase Global Inc. — issued key decisions in February holding that whether the operator of a crypto exchange may be held liable for the sale of unregistered securities under federal securities laws turns on whether the exchange is "centralized," meaning that it intermediates and transacts between the buyer and seller, or is "decentralized," meaning that the operator merely develops automated computer codes (aka "smart contracts") that facilitate the transfers.[6]
These decisions found that a decentralized exchange was not plausibly alleged to be a statutory seller under Section 12(a)(1) of the Securities Act, whereas a centralized exchange was plausibly alleged to be a statutory seller.[7]
Therefore the district court ordered bifurcated discovery and front-loaded resolution of that issue in Underwood,[8] subsequently ruling on a motion to compel and providing guidance as to what types of documents from both sides are pertinent to the question of whether a centralized exchange acted as a statutory seller with respect to users of the exchange who transacted in tokens.[9]
The Definition of "Security"
The question of whether a crypto-asset or transaction is a "security" continues to remain open and hotly contested with respect to a wide variety of crypto-assets and transactions.
The year 2025 saw a bit of clarity pronounced on this issue, however, by three federal court decisions (below); Congress' passing of the Genius Act; and the U.S. Securities and Exchange Commission's issuance of no-action letters and informal guidance. In sum, these sources found the following:[10]
- Fiat-backed stablecoins are not securities,[11] except during a de-pegging incident in which the stablecoin becomes untethered to the fiat, per the Southern District of New York's February decision in Donovan v. GMO-Z.com Trust Company Inc.[12]
- Transactions in fiat-backed stablecoins are not securities so long as they are neither investment contracts under the Howey test nor notes under the Reves test.[13]
- A token that is a commodity or reward whose value is earned through the user's efforts, such as providing fiber links or energy actions, is likely not a security.[14]
- A bridge token sold to institutional investors was a security, per the Southern District of New York's June decision in SEC v. Ripple Labs Inc.[15]
- Transactions in nonfungible tokens with promised future benefits were plausibly alleged to be securities, per the U.S. District Court for the Western District of Texas' August decision in Holland v. CryptoZoo Inc.[16]
- Although typical memecoin transactions are not securities, any memecoins or transactions with unique features may be securities under the Howey test.[17]
- Certain proof-of-work network protocol mining activities[18] and certain proof-of-stake blockchain protocol staking activities[19] are not securities.
- A nonsecurity crypto-asset, while it may be sold pursuant to an investment contract — which is a form of security — can separate itself from the investment contract when the issuer fulfills the representations or promises therein, fails to satisfy them, or otherwise terminates.[20]
Two district courts — the U.S. District Court for the Central District of California in August in In re: EthereumMax Investor Litigation, and the U.S. District Court for the Middle District of Florida in March in De Ford v. Koutoulas — issued crypto class certification decisions this year, granting them in part on the claims for sales of unregistered securities, thus demonstrating another reason that claims for the sale of unregistered securities in violation of federal and state securities laws continue to be popular with the plaintiffs bar.[21]
Specifically, in addition to not needing to prove fraud, plaintiffs bringing claims for sales of unregistered securities also do not have all the commonality and predominance issues that usually accompany fraud claims and other claims.
For example, these same decisions denied class certification on plaintiffs' claims brought under consumer protection statutes and for unjust enrichment.[22]
Crypto-Asset Class Actions
The year 2025 saw the filing of dozens of class actions involving crypto-assets; technologies and ecosystems against token issuers, promoters, and sellers; centralized and decentralized crypto exchanges; developers and operators of blockchains, crypto software and fintech platforms; bitcoin ATM operators; and more. These class actions alleged:
- Sale of an unregistered security in violation of federal and state securities laws (a popular claim that allows for rescission and does not require proof of fraud but rather proof of a security);
- Many types of misstatements and omissions in violation of state consumer protection laws, federal and state securities laws, and allegedly amounting to common law fraud;
- Misrepresentations in connection with a token merger;
- Data breaches and invasions of privacy; and
- Numerous miscellaneous claims, including breach of contract, unjust enrichment, negligence, replevin, conversion, violation of the Racketeer Influenced and Corrupt Organizations Act, and others.
Conclusion
Crypto class action litigation multiplied this year due to a number of factors. First, the number of cryptocurrencies went up by thousands this year while their total market capitalization decreased, and the market capitalization of the most widely held cryptocurrencies (bitcoin and ethereum) remained approximately flat.[23]
Moreover, the presidential administration reduced enforcement priorities relating to sales of crypto-assets.
In addition, another factor contributing to the continued growth of crypto disputes is the growth of artificial intelligence. AI produces media, code and data that can be tokenized into crypto-assets, while crypto technologies enable permissionless, global micropayments for AI-generated content, models and services.
Crypto networks are also beginning to power distributed computing and storage services that power decentralized AI platforms.
For all these reasons, we should expect to see an upward trend of key decisions and new cases next year and beyond as the law of crypto class actions continues to develop.
References
[1] See, e.g., In re: BlockFi Inc. Securities Litigation, Case No. 23-CV-1165 (D. N.J. Aug. 21, 2025) ($13.3 million — preliminary settlement approval granted to resolve claims alleging that certain directors and officers of a crypto lending and wealth management platform sold unregistered securities and committed fraud in violation of federal and state law when they sold crypto deposit accounts promising an interest rate); Harper et al. v. O'Neal et al. 
, Case No. 23-CV-21912 (S. D. Fla. Apr. 8, 2025) ($2.9 million – final settlement approval granted in class action to resolve claims alleging that issuer and promoter of nonfungible tokens granting control over avatars and utility tokens for use in virtual world sold unregistered securities in violation of federal securities laws).
[2] Carolus v. Coinbase Glob., Inc. , 2025 WL 3033736 (N.D. Cal. Oct. 7, 2025); Cordero v. Coinbase Inc. , 2025 WL 2223495 (N.D. Cal. Aug. 5, 2025).
[3] Carolus, 2025 WL 3033736; Cordero, 2025 WL 2223495.
[4] Houghton v. Polychain Alchemy LLC , 2025 WL 2965204, at *1 (9th Cir. Oct. 21, 2025); Samuels v. Lido DAO , 2025 WL 2529660 (N.D. Cal. Sept. 3, 2025).
[5] See, e.g., Young v. Solana Labs Inc. , 2025 WL 2953247 (9th Cir. Oct. 20, 2025) (affirming denial of motion to compel arbitration because "[the token purchaser]'s claims [against the issuer] are also not 'intimately founded in and intertwined with the underlying' Terms of Use [of the seller]"); Houghton, 2025 WL 2965204, at *4 (affirming denial of motion to compel arbitration because "there is no allegation of wrongdoing on the part of [the non-party crypto exchange] breaching its User Agreement in this case").
[6] Risley v. Universal Navigation Inc. , 2025 WL 615185, at *1 (2d Cir. Feb. 26, 2025); Underwood v. Coinbase Glob. Inc. , 2025 WL 438547 (S.D.N.Y. Feb. 7, 2025).
[7] Risley, 2025 WL 615185, at *3-4.
[8] Underwood, 2025 WL 438547, at *2, 7-8, 12.
[9] Underwood v. Coinbase Glob. Inc. , 2025 WL 1984293 (S.D.N.Y. July 17, 2025).
[10] The status of any crypto asset or transaction as a security or commodity is highly fact-specific such that a detailed analysis must be performed in each case.
[11] GENIUS Act, Public Law 119-27 (July 18, 2025).
[12] Donovan v. GMO-Z.com Tr. Co. Inc. , 779 F. Supp. 3d 372, 387 (S.D.N.Y. 2025).
[13] https://www.sec.gov/newsroom/speeches-statements/statement-stablecoins-040425.
[14] https://www.sec.gov/rules-regulations/no-action-interpretive-exemptive-letters/division-corporation-finance-no-action/doublezero-092925; https://www.sec.gov/rules-regulations/no-action-interpretive-exemptive-letters/division-corporation-finance-no-action/fuse-crypto-limited-112425.
[15] SEC v. Ripple Labs, Inc. et al. , No. 20-CV-10832, ECF No. 989 (S.D.N.Y. June 26, 2025).
[16] Holland v. CryptoZoo Inc. , 025 WL 2492970, at *28 (W.D. Tex. Aug. 14, 2025).
[17] https://www.sec.gov/newsroom/speeches-statements/staff-statement-meme-coins.
[21] In re: EthereumMax Inv. Litig. , 2025 WL 2377070, at *8 (C.D. Cal. Aug. 6, 2025); De Ford v. Koutoulas , 348 F.R.D. 724, 735-39 (M.D. Fla. 2025).
[22] In re: EthereumMax , 2025 WL 2377070, at *12-13; De Ford, 348 F.R.D. at 740-41.
[23] https://www.fool.com/investing/stock-market/market-sectors/financials/cryptocurrency-stocks/how-many-cryptocurrencies-are-there/; https://www.demandsage.com/number-of-cryptocurrencies/; https://coinmarketcap.com/curren.
Reprinted with permission of Law360.
