Biggest Legal Cases of Crypto in 2024

Genesis

Now an ex-crypto lending platform, Genesis was hit by a blindside legal battle over its bankruptcy issue. Because of the reduced market, the flow, and massive default, the company itself went under Chapter 11 in early of the year 2024 and stated that it could no longer honor its commitment.

They have been accused of embezzlement of funds and failure to disclose where user deposits are being channeled to, assets that compose most of the companies. To encourage discussions about the risks of dealing with centralized lending platforms, Genesis held over $3 billion of liabilities to creditors, crypto outlet The Block has revealed. The case also illustrates the need for more controls and more responsibility over holding users’ money.

Binance: Legal Mayhem and Obligation Matters

The world’s biggest cryptocurrency exchange platform Binance, continued its regulatory challenge in several other countries in 2024. The US Securities and Exchange Commission has charged Binance, the largest cryptocurrency exchange, with operating an unlawful securities transaction and defrauding investors. The company also was charged by the Commodity Futures Trading Commission (CFTC) with violations of laws against trading and market manipulations.

Celsius: Fraud allegations and founder arrest broke the company.

In 2024 the Celsius case rose to another level when the company's founder, Alex Mashinsky, was charged with fraud and market manipulation. Earlier this year, Celsius had already filed for bankruptcy in 2022, but more proof that came up accused Mashinsky of inflating company profits and using customer’s funds for high-risk investments.

While this company did go bankrupt and leave thousands of investors in deep losses, there was an article by Bloomberg that showed how it all happened. The current trial aims to restore the user and continue the campaigns on consumer protection in crypto lending platforms.

These high-profile cases highlight systemic issues within the crypto industry, including the lack of coordination between the systems, it leads to inefficiency, and even fraudulent performance because there are no specific regulatory policies governing the systems. The aftermath of these cases showed that retail investors are still not protected enough within the area of cryptocurrencies.

However, high conflict durations can prevent investors from having confidence in the crypto platforms, hence the need for more transparency and conformity.