According to a complaint filed yesterday, several investors are contemplating to reclaim money invested in the unprecedented initial coin offering (ICO) conducted for the development of EOS blockchain, amassing an aggregate $4 billion in cryptocurrencies.
Attorneys for the claimants are demanding more than $200 million of funds raised in an unlawful manner.
The plaintiff blames that block.one, which developed the EOS blockchain, conducted a security offering without any approval from regulators. The ICO conducted by block.one is seen by investors as a kind of investment in the blockchain focused company.
Text in the EOS’ pre-sale agreement indicates that the US investors were barred from taking part in the fundraising stage. It seems to be an attempt to evade issues with the SEC (Securities and Exchange Commission).
Block.one conducted the ICO without any kind of registration in the US. Notably, it did not request any kind of exemption from securities registration. Therefore, block.one opted for measures to keep the US investors at bay.
Nevertheless, some US investors did participate in the ICO, making block.one face the SEC’s ire. Last September, block.one paid $24 million to SEC for an out of court settlement.
The latest complaint blames that the firm, having offices in Blacksburg (Virginia) and Hong Kong, had intentionally raised money from the US investors.
“From 2017 through the present, to drive demand for EOS Securities, Defendants have aggressively courted investors throughout the United States. Block.one first announced itself at a May 2017 conference in New York City, and punctuated its arrival with expensive ad space on a Times Square billboard.”
Regarding a query on the quantum of funds received as investment from the US, James Koutoulas, one of the claimant’s lawyers, revealed that they have evaluated minimum loss of $200 in the US.
The plaintiff also brushed away block.one’s claims of working on decentralization as lies. Nevertheless, the issue does not end there. Earlier last month, law firm Roche Cyrulnik Freedman slapped multiple class-action suits against several cryptocurrency related firms including block.one on similar accusations.
