Investors of the EOS token sale have filed a class-action lawsuit against the blockchain firm Block.One. The plaintiffs are claiming that the blockchain company provided false statements and made up $200 million of the EOS initial coin offering, in violation of the securities law. Crypto Assets Opportunity Fund LLC and Johnny Hong filed a class-action lawsuit against Block.One in the US District Court. The lawsuit names Block.One’s CEO, Brendan Blumer, CTO Daniel Larimer, former Block.One partner Ian Grigg and former advisor Brock Pierce as defendants.
“Lawsuit claims over $200 million were raised illegally.”
According to the lawsuit, more and more EOS investors who participated in the token sale are seeking refunds. The EOS ICO was historic as it raised 4 billion US dollars. But the plaintiffs allege that over $200 million of that money was illegally raised. The plaintiffs also allege that the blockchain company provided investors false and misleading information about the EOS token sale. The lawsuit states that to drive the demand for and increase profit from the sales of EOS tokens, defendants violated the securities laws by making materially false and misleading statements about the token.
Block.One did not register EOS with the US SEC.
The blockchain company that raised $4 billion in the ICO did not register the EOS token sale as security with the US SEC. Therefore it relied on its measures to completely ignore US investors as a means of complying with the US regulator. The lawsuit also alleges that the company artificially inflated the prices for the EOS Securities and damaged unsuspecting investors. However, some US investors did participate in the ICO, and Block.one ended up meeting the SEC anyway. Later last year, Block.one reached an agreement with the US SEC for $ 24 million. Moreover, an EOS wallet has allegedly shut down and vanished with over $52 million user funds in last month.