NEW YORK, May 18, 2020 /PRNewswire/ — A diverse group of individual and corporate investors has filed a class action lawsuit today against blockchain software firm Block.one, alleging it defrauded them through a year-long illegal initial coin offering that netted the company in excess of $4 billion but left investors with an unregulated asset that became virtually worthless.
The suit, brought in federal court in the Southern District of New York, was filed jointly by leading investor law firm Grant & Eisenhofer along with renowned investor advocate James L. Koutoulas, blockchain and cryptocurrency litigator Jenny Vatrenko, and J. Samuel Tenenbaum of The Bluhm Legal Clinic’s Complex Civil Litigation and Investor Protection Center at Northwestern University.
The action, filed in the United States District Court for the Southern District of New York, is brought on behalf of all persons or entities who purchased or acquired EOS tokens during the period between June 26, 2017 and the present. The action is captioned: Crypto Assets Opportunity Fund LLC and Johnny Hong v. Block.one, Brendan Blumer, Daniel Larimer, Ian Grigg, and Brock Pierce, 1:20-cv-3829 (S.D.N.Y.). It is related to the action Williams et al. v. Block.One et al., 1:20-cv-02809 (S.D.N.Y.) pending before Judge Lewis A. Kaplan in the United States District Court for the Southern District of New York.
Today’s filing is Block.one‘s second legal challenge over its ICO. Last September, the company agreed to a $24 million settlement with the Securities and Exchange Commission — a relative slap on the wrist that did little to promote investor protection. The new complaint is an effort to hold Block.one and its leadership accountable for duping global investors in what may be “the biggest of all crypto frauds.”
In asserting violations by Block.one of Sections 5, 12(a)(1)-(2), and 15 of the 1933 Securities Act and Sections 10(b) and 20(a) of the 1934 Securities Exchange Act, the lawsuit alleges breach of fiduciary duty and unjust enrichment by defendants, who comprise both current and former company executives. They include co-founders Brendan Blumer and Daniel Larimer, who remain with Block.one, and co-founder Brock Pierce, who has since departed. Also named is former partner Ian Grigg.
Block.one, founded in 2017, has operations in Virginia and Hong Kong but is registered in the Cayman Islands. Starting in June 2017 and over the course of almost a year, it sold 900 million EOS cryptocurrency tokens by aggressively marketing to investors in the United States and other countries.
Announced with great fanfare and publicized as a means of funding a new open-source software and superior competitor to the Bitcoin and Ethereum blockchains, the offering was accompanied by a Times Square billboard ad, a bullish white paper, presentations by company principals at blockchain conferences and meet-ups, and promotion via crypto-focused online news and investor outlets. As the complaint…
Read more:Investors Bring Class Action Lawsuit against Block.one for “Biggest of All Crypto
