AI and crypto securities class actions on track for record highs in 2025

Securities class actions are predicted to reach new heights in 2025, with a noteworthy rise in cases related to artificial intelligence (AI) and cryptocurrencies. A report by Cornerstone Research and Stanford Law School revealed an increase in AI-related securities class actions, with twelve cases filed in the first half of 2025, potentially surpassing the total of fifteen filings in 2024.

According to Joseph Grendfest, a Stanford Law Professor and former SEC commissioner, the surge in AI-related litigation is attributed to the concept of AI washing. This involves investors claiming that companies overstate, misrepresent, or falsify their AI capabilities, leading to legal disputes when the truth emerges, resulting in losses for investors. Similarly, crypto-related filings during the first six months of 2025 matched the total for the entire previous year, with six cases filed. This figure nearly parallels the seven filings in 2024.

Overall, securities class action filings maintained stability in the first half of 2025, with 114 cases recorded, slightly down from the 115 filed during the same period in 2024. Excluding M&A filings, there were 111 core filings from January to June 2025, compared to 112 in the corresponding period last year. Despite this consistency, the Disclosure Dollar Loss (DDL) Index spiked to $403 billion in the first half of 2025, marking a 56% increase from a year ago and the highest semiannual total since the record high set in the first half of 2022.

The DDL Index refers to the change in the defendant firm’s market capitalization between the trading days before and after the class period. Additionally, the Maximum Dollar Loss (MDL) Index surged to $1,851 billion in the first half of 2025, a substantial 154% rise from the same period in 2024. This marked the eighth consecutive period where the MDL exceeded the historical average of $622 billion, illustrating significant volatility in market cap during class actions.

The report, titled “Securities Class Action Filings—2025 Midyear Assessment,” highlights the growing trend of securities litigations involving emerging technologies such as AI and cryptocurrencies. The litigation landscape in the financial industry continues to evolve, with companies facing heightened scrutiny over perceived misrepresentations related to innovative technologies. As these areas expand, legal actions are expected to increase, reflecting ongoing challenges in navigating legal boundaries within a rapidly changing sector.