Investors of This Popular Altcoin Filed For Parent Company
Crypto Assets Opportunity Fund LLC and Johnny Hong filed a lawsuit against the company on Monday in New York’s South District US District Court on Monday. Along with Block.One, CEO Brendan Blumer, CTO Daniel Larimer, cryptographer and previous Block.one partner Ian Grigg and previous consultant Brock Pierce are defendants.
Plaintiffs claim that Block.one provided investors with false and misleading information in order to collect billions of dollars in securities allegedly off the record. According to the complaint, Victoria Capital and Hong claim to have purchased tokens during the sale. This corresponds to an estimated $ 4 billion fund, as reported at that time.
“In order to increase sales demand and increase profits, EOS Securities allegedly violated the securities laws by making the defendants inflate EOS prices artificially, making financially false and misleading statements about EOS and stressing that innocent investors were harmed.
EOS and SEC
Pierce, Blumer and Larimer planned to launch a blockchain that will prioritize decentralized architecture in Block.one’s architecture in 2017. They then launched a first coin offer (ICO) for the EOS token, initially in the form of an ERC-20 token that can be exchanged for tokens in the native EOS network. The SEC eventually caused sales problems throughout the year, claiming that it was qualified as informal securities. Block.one then paid the agency $ 24 million.
In this new complaint, the plaintiffs emphasized that Block.one was fighting with the SEC using the title “EOS Securities” for the company’s token. Indeed, last autumn, the regulator stated that he saw EOS sales as an informal security sale.
The plaintiffs also claimed that Block.one lowered the EOS price by marketing it “aggressively” to US investors and insisting that EOS blockchain will outperform existing blockchains. The complaint claims that the defendants also highlighted potential investors saying that EOS is for Ethereum on steroids.
However, the complaint claims that by not performing better than other blockchains, it does not disclose important internal disputes and cannot be decentralized, Block.one mislead investors. The complaint details several examples that Pierce, Blumer, Larimer and Grigg claim to have made statements that do not reflect how EOS actually performed.