According to a May 18 complaint, more investors are seeking to recover the funds invested in the initial currency offering for EOS, which totalled $4 billion in cryptomoney. Plaintiffs‘ lawyers are asking for more than $200 million of that illegally raised money.
Conflict with U.S. securities law and investors
The complaint alleges that EOS was an unregistered securities offering by block.one. Block.one is the development company that led the ICO for EOS, which many saw as a form of investment in the company.
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The language in the EOS pre-sale purchase agreements told U.S. investors not to participate in the fundraising round. This was an effort to avoid conflict with the Securities and Exchange Commission (SEC). Is Bitcoin Circuit Safe, Is Bitcoin Trader Real, Is Immediate Edge A Scam, The News Spy Trading, Is Bitcoin Billionaire Safe, Bitcoin Profit Reviews, Is Bitcoin Evolution Safe, Bitcoin Era Reviews Uk, Bitcoin Revolution Trading, Bitcoin Code Platform did not register the offer in the United States, either as a security or under the securities registration exemptions, so they relied on their actions to bypass U.S. investors entirely as a means of compliance with the U.S. regulator.
However, some US investors participated in the ICO, and block.one ended up meeting with the SEC anyway. In September, block.one agreed to a $24 million fee.
New accusations of actively attracting investors
The new lawsuit alleges that the company, which has offices in Hong Kong and Blacksburg, Virginia, knowingly and willfully sought American investors:
„From 2017 to the present, to boost demand for EOS securities, Defendants have aggressively courted investors across the United States. Block.one first announced itself at a May 2017 conference in New York City, and punctuated its arrival with an expensive ad space on a Times Square poster.
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On the issue of how much investment actually came from the U.S., James Koutoulas, one of the plaintiffs‘ lawyers, told Cointelegraph that they were „estimating a minimum loss of 200 million in the United States.
The complaint further dismisses Block.one’s claims that it is working on decentralization as false.
However, that does not seem to be the end of the story. In early April, the law firm Roche Cyrulnik Freedman filed a series of class action lawsuits against a number of crypto companies, including block.one, based on similar allegations. The two cases will likely have to compete for the appointment of lead counsel – indeed, leadership over the lawsuit.
Cointelegraph approached Block.one’s legal team, but had received no response by the time of publication. This article will be updated if a response is received.