Block.one pays US$27.5 million to settle class-action lawsuit

Block.one, the company that launched a record-breaking $ 4.1 billion initial coin offering from the Cayman Islands in 2018, has paid $ 27.5 million to settle a class action lawsuit.

The lawsuit was filed by the Crypto Assets Opportunity Fund, which alleged Block.one misled investors in selling its EOS token.

The company, which is registered on Cayman but operates in Hong Kong, the US, Gibraltar and Singapore, said at the time it would use the proceeds from its 2018 coin offering to develop and promote the software behind the EOS blockchain as well for general expenses general.

Plaintiffs alleged that the proceeds were classified as revenue and then directed to Block.one’s cryptocurrency trading arm in Hong Kong, where they were invested in cryptocurrencies and traditional securities. They argued that token investors did not receive any of the profits from these investments, but instead went to the executives and shareholders of Block.one.

In addition, plaintiffs alleged that investors suffered losses because Block.one demonstrated that its token was not a security and the company did not register its token sale as a security offering in the United States.

In 2019, Block.one paid a $ 24 million civil penalty for settling fees with the Securities and Exchange Commission for not registering its token sale as a U.S. securities offering.

Block.one announced the court-approved settlement on Friday and stated that the company was of the opinion that the “lawsuit was unfounded and filled with numerous inaccuracies”.

“However, by accepting this settlement, we can focus more time and energy on running our business and delivering new products,” the statement said.

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