Block.one Settles Second Lawsuit Stemming from Past ICO
The SEC has announced that the settlement with blockchain company Block.one will conclude the agency’s investigation into an alleged fraudulent ICO in 2017.
If you missed the ICO for Block.one in September of 2017, you’re not alone—while ICOs have become the currency of the tech world, they’ve also become the most notorious for dubious practices. An ICO is an Initial Coin Offering, a method of crowdfunding that has become increasingly popular over the past few years. The promise is that during an ICO, a cryptocurrency is first created, which is then “sold” to investors. This is often done in the form of a token, which is a virtual representation of the coin that has value similar to a share. Last month, a class action lawsuit was filed against Block.one, a company that created the EOS token and conducted an ICO for it
The last time Block.one Ltd. (BAV: “Block One”), the blockchain startup behind the world’s most popular initial coin offering platform for initial coin offerings (ICOs), got into legal trouble after the company continued to use the same New York-based legal firm that had previously represented the company in a previous ICO lawsuit. In the case, the plaintiff claimed that the Block.one ICO had violated the Securities Act of 1933 which prohibits the offering of securities in the U.S. without registration.. Read more about is block one records legit and let us know what you think.
A resolution to a longstanding lawsuit between the Crypto Assets Opportunity Fund (CAOF) and Block.one has finally been reached, which will see Block.one on the hook for $27.5M.
The aforementioned settlement stems from an ICO, which ran between June 2017 and June 2018. This event, which was controversial at the time due to its extended run-period, successfully generated over $4B for Block.one.
Although Block.one may have been successful in convincing investors to hand over their hard-earned funds, both the SEC and CAOF were not as impressed – each of which alleged the ICO constituted the illegal offering of unregistered securities.
While a settlement may have been reached, Block.one has remained steadfast in its innocence. Rather, the settlement was reached as a means of finally putting its past behind it, so that it could look forwards instead.
The company states that, “Block.one believes this lawsuit was without merit and filled with numerous inaccuracies. However, accepting this settlement allows us to focus more time and energy on running our business and delivering new products.”
Block.one did not elaborate on what these inaccuracies were, however they did allude to a productive future with new products on the way.
A Growing Tally
Notably, this settlement is the second of its kind to stem from Block.one’s ICO. This first occurred roughly two years ago when the Securities and Exchange Comission (SEC) targeted Block.one due to the ICO.
Not only was a settlement reached in both instances, but the agreed upon figures were quite similar – the SEC received $24M while the CAOF received $27.5M.
Cumutively Block.one has paid a total of $51.5M in settlement fees to date. While this may be a lofty total, it is a ‘drop in the bucket’ when compared to the $4B that the company was able to raise.
Over the past few years, there have been many lawsuits levied against companies which took part in ill-thought out ICOs, and similar actions. Interesting, it seems as though all parties involved seem to prefer opting for settlements as opposed to seeing the lawsuits through. The following are a few other examples of settlements reached between the SEC and other blockchain related companies from years past.Last summer, a class-action lawsuit was filed against Ripple Labs Inc. (the creators of Ripple) for allegedly creating a “series of materially false and misleading statements and omissions” in their Pre-Sale Registration Statement relating to an ICO they’d held in December 2013. The complaint contended that the alleged conduct “violated the securities laws of both Texas and New York.” Now, more than two years later, the parties have settled—with Ripple paying $30,000 to the plaintiffs.. Read more about sec ico settlements and let us know what you think.
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