Crypto Securities Class Actions: The Defendant's First 120 Days

By Brandon Orewyler | July 2026

BitGo Holdings, Inc. priced its initial public offering on January 22, 2026: 11,821,595 shares of Class A common stock at $18.00 per share, roughly $212.8 million in total, listed on the New York Stock Exchange under the ticker BTGO.¹ On June 8, 2026 (137 days later), a federal securities class action named the company and eight of its officers and directors in the Eastern District of New York.² For crypto and digital-asset-treasury companies that went public into the 2025-26 window, Arsenault v. BitGo Holdings is the case to study: the machinery it triggered is the machinery that would take over their own first months as securities class action defendants.

The honest framing of this moment has two layers. The first layer is regulatory: according to September 2025 trade-press reports relaying Wall Street Journal reporting, the SEC and FINRA contacted more than 200 companies that had announced crypto-treasury strategies, focused on pre-announcement trading spikes and possible Regulation FD problems.³ Those are inquiries, not lawsuits. The second layer is litigation, still a small, early cluster: Linkedto Partners v. DeFi Technologies (December 2025), Arsenault v. BitGo (June 2026), and, as a precursor, the MicroStrategy suit voluntarily dismissed in August 2025.⁴⁵ This is not a flood. It is a template being tested against a new defendant class.

What follows: the clocks the Private Securities Litigation Reform Act (PSLRA) starts on filing, why the discovery stay is the structural advantage, which of the two claim families a company is facing, what the filed complaints allege (and get wrong), and what a newly public crypto company should do.

Key Takeaways

• The first 120 days are mostly plaintiff-side procedure. The PSLRA’s published notice, 60-day lead-plaintiff window, and court appointment of lead plaintiff run before the defendant answers anything.⁶
• The discovery stay is the defendant’s structural advantage. “[A]ll discovery and other proceedings” are stayed while a motion to dismiss is pending, so the pleadings get tested before a single document is produced.⁷
• Two claim families, two different fights. IPO cases like Arsenault pair Securities Act Sections 11 and 15 (offering documents, no fraud intent) with Exchange Act Sections 10(b) and 20(a) (aftermarket statements, scienter); the mix drives the defense posture.²
• The regulatory sweep is not litigation. The reported SEC/FINRA outreach to 200+ crypto-treasury companies is an inquiry lane with its own dynamics; conflating it with the filed-suit cluster overstates both.³
• First-filed complaints are speed products. The BitGo complaint misstates the company’s own offering proceeds and carries an internal class-period inconsistency; the offering record is the defendant’s first factual audit.²

What Happens in the First 120 Days After a Securities Class Action Is Filed?

After a federal securities class action is filed, the PSLRA sets three clocks: published notice to the class within 20 days of the complaint, a 60-day window for class members to move for lead plaintiff, and a court appointment the statute directs “[n]ot later than 90 days” after notice, with consolidation decided first.⁶ None of those clocks requires anything of the defendant, who watches the lead-plaintiff contest (a competition among movants over who has the largest financial interest) from the gallery.

The live cases show the beats in practice. In DeFi Technologies, the complaint was filed December 1, 2025; competing motions were timely filed January 30, 2026; and the court appointed Jaime Romero lead plaintiff, with The Rosen Law Firm as lead class counsel, on April 6, 2026 (about four months after filing).⁸ In BitGo, plaintiffs’-firm notices peg the lead-plaintiff deadline at August 7, 2026, and the defendants’ first docket move was a June 17 joint motion to extend their time to respond.⁹ That pattern is standard: the operative complaint usually arrives only after the appointed lead plaintiff amends.

One calibration: the 90-day appointment clock is a statutory target, not a lived timetable, and nothing in this stage resolves the merits. The motion to dismiss (the actual first battle) is briefed against an amended complaint months after filing and resolves on the court’s schedule, not the statute’s.

If your company was just named, the near-term calendar belongs to the plaintiffs’ bar; your work in that window is insurance, preservation, and the record audit, not briefing.

Why the Discovery Stay Is the Defendant’s Structural Advantage

The PSLRA stays “all discovery and other proceedings … during the pendency of any motion to dismiss,” unless the court finds particularized discovery necessary to preserve evidence or prevent undue prejudice.⁷ That single sentence restructures the case’s economics: the complaint must survive on what plaintiffs could assemble from public documents (SEC filings, press releases, earnings calls) before anyone sees an internal email.

The stay works in combination with the PSLRA’s heightened pleading requirements, which demand that fraud complaints specify each misleading statement and plead facts creating a strong inference of scienter.¹¹ The early case is therefore a document-construction fight over the company’s own disclosures, fought at the pleading stage with no discovery burn. That is why placeholder complaints read the way they do (long block quotes from prospectuses and earnings calls followed by “the foregoing was misleading”), and why the defense side’s first substantive investment is a disciplined comparison of the challenged statements against the full disclosure record, including the risk factors the complaint does not quote.

“The discovery stay means the pleadings get tested before a single internal document is produced --- that is the defendant’s whole early game.” --- Brandon Orewyler, Principal, Astraea Counsel

If the complaint against your company quotes your filings selectively, the unquoted disclosure is your motion-to-dismiss raw material, and the stay means you fight there first.

Section 11 or Section 10(b): Which Claim Family Is Your Company Facing?

Arsenault v. BitGo pleads both families: Securities Act Sections 11 and 15 attacking the IPO offering documents, and Exchange Act Sections 10(b) and 20(a) attacking statements made after trading began. It pleads no Section 12(a)(2) count.² The distinction determines the state of mind in dispute, who can sue, and the realistic defense postures.

Section 11 is the registration-statement claim. It requires no fraudulent intent (the complaint itself frames the offering documents as “negligently prepared”), but it is bounded: only purchasers who can trace their shares to the challenged registration statement have standing, signatories and directors are the defendant class, and due diligence is a statutory defense for everyone but the issuer.¹¹ Section 10(b) reaches aftermarket statements and requires scienter, loss causation, and reliance under the PSLRA’s heightened standard. In Arsenault, the Section 11 theory rides the January 2026 offering documents, the 10(b) theory rides post-IPO press releases and the March 2026 earnings call, and the insider-sale allegations exist to prop up scienter for the latter.² The claim-by-claim menu from the investor’s side of the same chessboard is laid out in our plaintiff-side guide to private crypto securities litigation; this article stays in the defendant’s chair.

If your company IPO’d within the last year, assume both families arrive together, and treat the offering documents and the aftermarket record as two separately defended fronts.

What Does Arsenault v. BitGo Actually Allege?

The complaint’s core theory is that BitGo “understated the scope and severity of the risk that declining digital asset prices posed” to its business, in the IPO offering documents and in public statements across a class period running from January 22 to May 13, 2026.² Two disclosure events anchor it: the March 26, 2026 annual results (a $14.8 million net loss for 2025 that the company said was “materially driven by declines in digital asset prices impacting the Company’s Bitcoin treasury,” followed by a 15.71% drop to $7.67), and the May 13, 2026 first-quarter report (a $60.7 million net loss, followed by a 17.2% drop to $9.86, per the complaint’s own figures).² The scienter allegations lean on insider sales: 436,645 shares for over $7.3 million across three officers during the class period.²

Read as a defense-side audit target, the complaint also illustrates why the offering record is the first stop. Its opening paragraph recites a class period beginning “January 22, 2025,” while paragraph 44 pegs the start to January 22, 2026, the day BitGo’s stock began trading on the NYSE; the 2026 date is consistent with the rest of the pleading. It alleges the IPO sold “11,821,595 million shares” and raised “over $187.58 million” for the company, where the final prospectus’s fee table shows 11,821,595 shares total and proceeds before expenses to the company of $184,581,350.10.¹ None of this is case-dispositive, but it is diagnostic: first-filed PSLRA complaints are speed products built from public filings, and every figure in them should be checked against the primary record.

One precision point is worth fixing here. The Office of the Comptroller of the Currency’s December 12, 2025 action was a conditional approval for BitGo’s subsidiary, converting BitGo Trust Company, Inc. (a South Dakota state trust company) into BitGo Bank & Trust, National Association, an uninsured national trust bank under OCC Charter No. 25366. The OCC letter is explicit that the bank “will not take deposits and will not be insured by the Federal Deposit Insurance Corporation.”¹² The charter belongs to the subsidiary, not to BitGo Holdings, the listed issuer now defending the class action. Which entity holds which license is exactly the kind of detail disclosure drafting, and disclosure litigation, turn on.

If a complaint against your company is built entirely from your own public filings, audit those filings against the complaint line by line before conceding a single characterization.

What Do the Other Filed Crypto Securities Class Actions Show?

Two other cases frame the cluster. Linkedto Partners LLC v. DeFi Technologies is the Exchange-Act-only shape: Sections 10(b) and 20(a), no Securities Act counts, built on a guidance cut rather than an offering.⁴ The company, a Nasdaq-listed digital-asset-treasury firm, projected $201.07 million in 2025 revenue two days after its May 2025 listing, raised the figure to $218.6 million in August, then in November 2025 cut the forecast to approximately $116.6 million, attributing the reduction to “a delay in executing DeFi Alpha arbitrage opportunities previously forecasted due to the proliferation of [DAT] companies.”⁴ The stock fell 27.59% over two sessions. The case is past its lead-plaintiff stage and running on an amended complaint filed June 12, 2026, making its docket the best public preview of the PSLRA calendar for this defendant class.⁸

Hamza v. MicroStrategy, the precursor, teaches a narrower lesson than its headline. The co-lead plaintiffs voluntarily dismissed under Rule 41(a)(1)(A)(i) by joint stipulation filed August 28, 2025, so-ordered the next day, before any answer or motion for summary judgment and before class certification. The dismissal was with prejudice as to the co-lead plaintiffs’ and the original plaintiff’s own claims, “but not absent class members’ claims,” which the stipulation expressly preserved.⁵ An early exit ended that case, not the underlying exposure; reading the dismissal as a merits vindication of treasury-strategy disclosure reads more than the document says.

If your company’s stock traded down after a guidance cut tied to digital-asset conditions, the DeFi Technologies docket is the template a complaint against you would follow.

Does the SEC and FINRA Crypto-Treasury Sweep Change the Calculus?

Not directly, and the distinction is worth keeping sharp. According to September 2025 trade-press reports relaying Wall Street Journal reporting, the SEC and FINRA contacted more than 200 public companies that had announced crypto-treasury strategies, after surveillance flagged pre-announcement stock-price spikes and unusual volume; the reported focus is Regulation FD and insider trading around leaked plans, with roughly 212 companies said to have announced around $102 billion in crypto-purchase fundraising.³ No agency release confirms those figures on this record, and a regulatory inquiry letter is not a class action.

The two layers interact all the same. A company receiving sweep outreach is generating a written record private plaintiffs will eventually seek, and the disclosure theme under both layers runs straight through Arsenault: fair-value volatility in a digital-asset treasury flows into reported net income, and risk-factor language that frames that exposure generically will be read, after a drawdown, as understating it. Item 105 of Regulation S-K requires a discussion of the material factors that make the company or offering speculative or risky, and that regulation is where the sweep’s disclosure concerns and the private complaints’ Section 11 theories converge.¹³ Parallel-proceeding posture (what changes when the SEC’s interest turns formal, and how a Wells notice works) is covered in our guide to SEC crypto enforcement defense; the broader landscape is tracked in our 2026 crypto enforcement tracker.

If your company holds a digital-asset treasury, your risk factors should quantify how price declines transmit into reported results, because that transmission is what the filed complaints attack.

What Should a Newly Public Crypto Company Do Now?

Before any filing, the work is disclosure hygiene; after one, it is sequencing. Astraea Counsel advises token issuers and fintech companies on securities-law positioning and pre-launch compliance, and the pattern across these complaints maps directly onto that pre-filing work: the statements that draw counts are risk factors that describe volatility without quantifying its transmission into results, guidance issued into conditions that management is simultaneously calling challenging, and confidence language layered over cautionary language until, in the complaint’s telling, the reassurances negated the caution.²

In the first 30 days after a complaint names the company:

• Notice every potentially responsive D&O policy in the tower promptly and in writing (claims-made coverage punishes late notice).
• Issue a litigation hold that reaches officers’ and directors’ communications.
• Freeze insider transactions pending advice.
• Commission the line-by-line audit of the complaint against the offering record.

(If the triggering event was a hack or exploit rather than a market drawdown, the incident-response sequence in our protocol-hack legal playbook runs first, and its securities-exposure section bridges back here.) In the following one to two quarters: track the lead-plaintiff contest, negotiate a response schedule keyed to the amended complaint, begin the motion-to-dismiss build against the operative pleading, and align any parallel regulatory response so the company is not telling two stories. Longer term, the positioning work is the same whether or not a suit ever arrives: risk-factor calibration under Item 105, guidance discipline in volatile conditions, precision about which entity holds which charter or license, and clarity about how each token the company touches is classified, a question with its own map in our SEC and CFTC token taxonomy guide.¹³

If your company went public into the 2025-26 window, run the offering-record audit now, while the docket is still someone else’s.

Frequently Asked Questions

Does the August 7, 2026 lead-plaintiff deadline in the BitGo case matter to the defendant?

Not as an obligation; it is a plaintiff-side deadline for class members to move for lead plaintiff under the PSLRA.⁶ It matters as a calendar marker: the movants’ filings preview the claimed losses and likely lead counsel, and the operative amended complaint follows the appointment.

Can a securities class action defendant take discovery right away?

No. The PSLRA’s stay of “all discovery and other proceedings” during a pending motion to dismiss runs in both directions, subject only to the statute’s narrow preservation and undue-prejudice exceptions.⁷ The early case is fought on the pleadings and the public record.

Did the MicroStrategy dismissal end that securities exposure?

Only for the plaintiffs who dismissed. The stipulation was with prejudice as to their own claims but expressly not as to absent class members, and it preceded any answer or certification.⁵ The broader purchaser class’s claims were preserved, not adjudicated.

The Playbook Is Old; the Defendants Are New

Nothing in the PSLRA changed for crypto. What changed in 2025-26 is the defendant class: digital-asset infrastructure companies and treasury strategies arrived in the public markets, their results now transmit token-price volatility into GAAP net income, and the securities class action bar has begun running its thirty-year-old template against them, two filed cases at a time. The companies that fare best in that machinery are the ones whose disclosure record was built to be litigated against before anyone thought to litigate it. For a newly public digital-asset company, the time to pressure-test that record against these complaints’ theories is while the docket is still someone else’s.

Related Resources

• When the SEC Won’t Act: Private Crypto Litigation
• Your Protocol Just Got Hacked: The First 72 Hours
• SEC Crypto Enforcement Defense: The Wells Notice Guide
• Crypto Enforcement Tracker 2026
• The SEC and CFTC Token Taxonomy: Five Categories

This article provides general information for educational purposes only and does not constitute legal advice. Securities litigation and digital-asset regulation are evolving rapidly. Consult qualified legal counsel for advice on your specific situation. Attorney Advertising.

Footnotes

1. BitGo Holdings, Inc., Prospectus (Form 424B4), Registration No. 333-290409 (Jan. 23, 2026), available at https://www.sec.gov/Archives/edgar/data/1740604/000162828026003180/bitgoholdingsinc424b4-janu.htm (11,821,595 total shares at $18.00; $212,788,710.00 aggregate offering price; $184,581,350.10 proceeds before expenses to the company). ↩ ↩²

2. Class Action Complaint, Arsenault v. BitGo Holdings, Inc., No. 1:26-cv-03428 (E.D.N.Y. filed June 8, 2026), ECF No. 1. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰

3. Jai Hamid, “SEC and FINRA Probe Crypto-Treasury Stock Spikes at 200+ Firms,” Cryptopolitan (Sept. 26, 2025) (relaying Wall Street Journal reporting; Architect Partners data), available at https://www.cryptopolitan.com/sec-finra-probe-crypto-treasury-stock-spikes/; Prashant Jha, “Over 200 Firms Face SEC, FINRA Scrutiny Tied to Crypto-Treasury Deals,” CCN (Sept. 26, 2025) (same), available via Yahoo Finance at https://finance.yahoo.com/news/over-200-firms-face-sec-141715311.html. ↩ ↩² ↩³

4. Class Action Complaint, Linkedto Partners LLC v. DeFi Technologies Inc., No. 1:25-cv-06637 (E.D.N.Y. filed Dec. 1, 2025), ECF No. 1. ↩ ↩² ↩³

5. Joint Stipulation Concerning Voluntary Dismissal, In re MicroStrategy Incorporated d/b/a Strategy Securities Litigation, No. 1:25-cv-00861 (E.D. Va. Aug. 28, 2025), ECF No. 35, so ordered, ECF No. 36 (Aug. 29, 2025). ↩ ↩² ↩³

6. 15 U.S.C. § 78u-4(a)(3)(A)-(B) (PSLRA early notice, 60-day lead-plaintiff window, consolidation, and appointment provisions). ↩ ↩² ↩³

7. 15 U.S.C. § 78u-4(b)(3)(B) (PSLRA stay of discovery). ↩ ↩² ↩³

8. Memorandum & Order, Linkedto Partners LLC v. DeFi Technologies Inc., No. 1:25-cv-06637 (E.D.N.Y. Apr. 6, 2026), ECF No. 29 (appointing Jaime Romero lead plaintiff and The Rosen Law Firm lead class counsel; noting lead-plaintiff motions timely filed January 30, 2026); Docket, id., ECF No. 46 (amended complaint filed June 12, 2026). ↩ ↩² ↩³ ↩⁴

9. Faruqi & Faruqi, LLP, BitGo Holdings, Inc. investor notice (accessed July 2026), available at https://www.faruqilaw.com/case/bitgo-holdings-inc/ (plaintiffs’-firm notice reciting an August 7, 2026 lead-plaintiff deadline; secondary source). ↩ ↩²

10. Docket, Arsenault v. BitGo Holdings, Inc., No. 1:26-cv-03428 (E.D.N.Y.), via CourtListener RECAP, https://www.courtlistener.com/docket/73456806/arsenault-v-bitgo-holdings-inc/ (joint motion for extension of time to answer, move against, or otherwise respond, filed June 17, 2026). ↩

11. 15 U.S.C. §§ 77k, 77o (Securities Act §§ 11, 15); 15 U.S.C. §§ 78j(b), 78t(a) (Exchange Act §§ 10(b), 20(a)); 17 C.F.R. § 240.10b-5; 15 U.S.C. § 78u-4(b)(1)-(2) (PSLRA heightened pleading standards). ↩ ↩²

12. Office of the Comptroller of the Currency, News Release 2025-125, “OCC Announces Conditional Approvals for Five National Trust Bank Charter Applications” (Dec. 12, 2025), and accompanying decision letter (OCC Charter No. 25366), available at https://www.occ.gov/news-issuances/news-releases/2025/nr-occ-2025-125.html. ↩

13. 17 C.F.R. § 229.105 (Item 105 of Regulation S-K). ↩ ↩²