Investors fight to keep Bancor securities case out of Israeli court

Lawyers representing investors in a class action against BProtocol Foundation, parent company of decentralized liquidity network Bancor, have asked for the case to be tried in the United States rather than Israel.

According to court records filed Nov. 2 in the U.S. Southern District of New York, lawyers for Timothy C. Holsworth, the lead plaintiff in the class-action lawsuit against defendants BProtocol and four of its executives, argued that the firm's "Repeated and extensive contacts with the United States" for marketing its Bancor Network Token made the SDNY the more appropriate venue.

Lawyers for BProtocol co-founders Eyal Hertzog, Yehuda Levi, Guy Benartzi and Galia Benartzi had previously filed a motion suggesting that a court outside the U.S. would be more suited to oversee the case due to the "International" nature of the complaint.

The legal team proffered Israel's "Robust legal system" as a more appropriate venue to try the case, as the blockchain firm has offices in the country.

"Defendants have not show that this Court is an inconvenient forum," Holsworth's legal team asserted.

BProtocol Foundation is one of seven crypto firms facing court in New York following a series of lawsuits filed in April.

The lawsuits allege that several crypto exchanges and issuers sold unlicensed securities without broker-dealer licensing and engaged in market manipulation in addition to a number of them selectively withholding information from investors regarding the sale of their tokens as securities.

In this particular case, Holsworth alleges the blockchain firm violated U.S. securities laws by "Promoting, offering, and selling" its BNT tokens since June 2017.

Monday's court records show that his legal team asserts BNTs are securities governed by the Securities Act of 1933 since they are centralized ERC-20 tokens.

"A reasonable investor could not have concluded and properly alleged that BNT were securities until, at the earliest, April 3, 2019, when the SEC released a detailed analysis of digital assets, indicating that BNT and similar digital tokens are 'investment contracts' and therefore securities," lawyers for the plaintiff stated.