Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—S.D.N.Y.: Class certification denied in suit tied to defunct crypto token, (Jul 14, 2026)

By Suzanne Cosgrove

Class action status was denied chiefly because plaintiffs did not satisfy the predominance and superiority requirements of Rule 23(b)(3).

In a securities fraud case filed in the Southern District of New York, the court denied a motion brought by plaintiffs to certify a class solely as to their RICO claim in an alleged pump-and-dump scheme linked to a now-defunct crypto token called the Helbiz Coin. (Barron v. Micromobility.com Inc., No. 1:20-cv-04703-PKC (S.D.N.Y., July 8 2026}}.

The plaintiffs moved to certify a class of purchasers of Helbiz Coin from January 1, 2018, to January 1, 2023, and “seek certification of claims pursuant 18 U.S.C. 1961 et seq. (RICO) against defendant Micromobility.com Inc. (referred to by the company’s name at the time of the events in question -- Helbiz Inc.) and the individual defendants.

The class definition in the case was limited to “purchasers” and did not encompass coin holders at large, including holders who received free coins via promotional airdrops.

The court stated it denied the motion for several reasons, chiefly because plaintiffs did not satisfy the predominance and superiority requirements of Rule 23(b)(3). In addition, the motion ignored RICO’s domestic-injury requirement and did not explain how generalized proof can show domestic injury to class members, many of whom purchased on foreign exchanges and held the coin in wallets located in foreign countries.

Plaintiffs’ proposed method for proving causation and damages under RICO was intertwined with theories of securities fraud, “even though the RICO statute providing a private right of action bars RICO claims that sound in securities fraud,” the court noted.

Further, the Supreme Court has held that “[s]ection 1964(c) requires a civil RICO plaintiff to allege and prove a domestic injury to business or property and does not allow recovery for foreign injuries.” RJR, 579 U.S. at 354.

Background. According to the filing, plaintiffs’ RICO claim relates to an initial coin offering (ICO) that was marketed to raise revenue for a vehicle-sharing business called Helbiz Inc. The Helbiz Coin was promoted as the exclusive way for customers to rent vehicles through an anticipated Helbiz vehicle-sharing platform.

The plaintiffs said Helbiz sought to escape the scrutiny of U.S. regulators, specifically the SEC, by misrepresenting that the coin was issued by a Singapore company called Helbiz Mobility System Pte. Ltd., (HMSP) a purportedly sham entity that defendants formed to deceive the SEC about the coin’s status as a security issued in the U.S. Plaintiffs asserted that in reality, the ICO was orchestrated and run by Helbiz officers in New York.

The ICO and an ICO pre-sale took place from January to March 2018 on the Ethereum Network, using a self-executing code called a “smart contract.” Participants in the ICO bought coins with Ether cryptocurrency held in their cryptocurrency wallets. ICO participants received 6,000 Helbiz Coins for one Ether, and new coins were “minted” at the time of purchase.

ICO total contested. However, the amount raised in the ICO is in dispute, the court filing stated. Defendants assert that it raised $1.56 million, but plaintiffs argue that it raised between $38 million and $50 million. The defendants stated that about 11.6 million coins were bought by 2,338 wallets during both the ICO and its presale. They also asserted that approximately 43 percent of the total value of the ICO and ICO presale was purchased by one individual, Saeed Al-Darmaki, who bought 4.65 million coins.

An expert called by the defendants, John Powers, reported approximately 28,200,000 Helbiz Coins were distributed through airdrops without any consideration from their recipients. Powers estimated that approximately 76 percent of current Helbbiz Coin holders received their coins through airdrops.

Defendants separately asserted that many coin holders participated in an “exit swap,” in which coins purchased in the ICO were redeemed for 100 percent of the original consideration, and that coins purchased in the secondary market on coin exchanges were redeemed at 200 percent of the then-prevailing market price.

Declarations filed. Each of the four plaintiffs in the case described his acquisition of the Helbiz Coin. Three are U.S. citizens and the fourth, a U.K. citizen, bought coins while in the U.S.

However, the court found that even if plaintiffs could demonstrate domestic injury through evidence common to the class, their motion would be denied for the separate reason that their proposed methodology for proving class-wide causation and damages is anchored in securities fraud.

The court reiterated that Section 1964(c) expressly bars a RICO plaintiff from relying on conduct that would have been actionable securities fraud.

Judge: Castel, P.

Attorneys: Anand Swaminathan (Loevy & Loevy) for Ryan Barron. Robert Gerard Heim (Tarter Krinsky & Drogin LLP) for Micromobility.Com Inc.

Companies: Micromobility.Com Inc.

MainStory: TopStory LitigationEnforcement Blockchain ExchangesMarketRegulation FraudManipulation GCNNews