Will We See More Class Action Lawsuits Against Successful ICO's of the Era?
Earlier today a Class Action Complaint was filed against Block One, the parent company behind the cryptocurrency EOS (EOS). In addition to Block One, Brendan Blumer, Daniel Larimer, Ian Grigg and Brock Peirce, have also been named in the case. The suit was filed by the Crypto Assets Fund LLC, a Latin American private cryptocurrency fund based in the British Virgin Islands and Northbrook, Illinois.
What Is the Block One Case About?
Crypto Assets LLC listed a long list of complaints and allegations of misconduct by Block One for their 2017 EOS ICO. As expected, Block One has been accused of selling unregistered securities US-based investors. Moreover, they have advertised the sale to US residents deliberately with their EOS billboard in New York's Time Square.
It is important to note that in 2017, there was no clear ruling within the United States regarding ICOs and token sales.
In addition to the above, Crypto Asset Funds claimed Block One misrepresented EOS as a superior decentralized blockchain. They instead claim that EOS is a highly centralized blockchain and not superior to its competition. The plaintiffs claimed that the block producers have a high concentration of power that contradicts decentralization and that other blockchains are technically superior.
Furthermore, they claimed that Block One's EOS based social media platform "Voice" has been given preference rather than a decentralized blockchain. This move allegedly hurt EOS investors and supporters according to the plaintiffs.
EOS, ICOs, & the Law
There have been many cases have been filed against ICOs that failed to produce a functioning cryptocurrency. While EOS might have made some lofty promises, it reached most of them and is within the top ten cryptocurrencies by marketcap.
Regardless it seems that the case will head to trial by jury.
This could be seen as a warning to other successful ICOs of the era, including Binance Coin (BNB), Chainlink (LINK) and possibly others.
Written by Jonathan Ganor
Writer & cryptocurrency aficionado