Florida Judge Partially Certifies Class in LGBCoin Securities Lawsuit
On Monday, March 31, 2025, Law360 reported that a Florida federal judge partially certified a class of purchasers of the meme-inspired cryptocurrency LGBCoin in a lawsuit alleging that the price of the tokens plummeted after a much-publicized plan to sponsor a NASCAR driver collapsed.
U.S. District Judge Paul G. Byron issued an order certifying a class of buyers regarding their claims related to the sale of unregistered securities. However, he rejected their claims of unjust enrichment, stating that the plaintiffs failed to provide a sufficient argument for the predominance of those claims.
Judge Byron noted that even if the plaintiffs had adequately argued their case, they would not meet the predominance requirement. This is because they sought to certify a nationwide class while their unjust enrichment claims were based on state law. The judge stated, “Plaintiffs make no attempt to identify what state laws apply to the potential class members’ unjust enrichment claims, nor do they identify whether there is a homogeneity or manageable variation among such states’ laws.” He emphasized that without this information, it was impossible to determine whether the legal questions governing each class member’s claims were predominantly subject to generalized proof.
Despite these issues with the unjust enrichment claims, Judge Byron found that the proposed class met all necessary requirements for the claims related to LGBCoin being an unregistered security. He certified a class consisting of all individuals who purchased the cryptocurrency between November 2, 2021, and March 15, 2022.
The judge also dismissed the defendants’ arguments that the plaintiffs lacked standing to sue and that LGBCoin should not be classified as a security.
The cryptocurrency in question is linked to the “Let’s Go Brandon” meme, which originated from a misinterpretation of profane chants directed at President Joe Biden during a NASCAR event, repackaged as a supportive phrase for a racer.
The plaintiffs, led by Sandra Bader, Eric De Ford, and Shawn R. Key, assert that they bought LGBCoin in part due to the project’s promotion of an upcoming NASCAR partnership. They claim to have incurred significant losses when the anticipated deal fell through, causing the coin’s value to near zero. The suit has undergone three amendments since its initial filing in April 2022, and NASCAR was previously named as a defendant before being dismissed from the case.
The LGBCoin purchasers allege that the cryptocurrency was partially created by James Koutoulas, a hedge fund CEO identified as a Republican influencer.
Following the ruling, Koutoulas expressed his satisfaction with the denial of certification for the unjust enrichment claims but expressed surprise at the court’s decision to certify the unregistered securities claims. He referenced a statement from the U.S. Securities and Exchange Commission (SEC) in February, which indicated that meme coins do not involve the offer and sale of securities under federal law.
The SEC’s Division of Corporation Finance had previously issued a statement explaining that meme coins, viewed as speculative assets with little functionality, are akin to collectibles and do not require registration with the agency. The statement underscored that meme coin purchasers and holders are not protected by federal securities laws.
Source: Law360
