Block.one which raised $4.1 billion back in 2018 for issuing more than a year-long EOS ICO has opted to settle for $27.5 million from the class-action lawsuit brought against it by a group in the name of Crypto Assets Opportunity Fund - COAP.
In a statement issued on its website on Sunday, the 13th of June 2021, Block.one said
“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.”
Crypto Assets Opportunity Fund LLC and Johnny Hong had filed a class-action lawsuit against Block.one on April 3, 2020, where the CEO Brendan Blumer, former CTO Daniel Larimer, cryptographer and previous partner Ian Grigg, as well as Brock Pierce who previously acted as advisor for the project, were all named as the defendants in a US District Court in Southern New York.
The plaintiffs in the case had alleged that Block.one in a bid
“To drive the demand for and increase profit from the sales of EOS Securities, Defendants further violated the securities laws by making materially false and misleading statements about EOS, which artificially inflated the prices for the EOS Securities and damaged unsuspecting investors.”
After conducting the successful sale of EOS tokens to power the base layer EOSIO protocol, the company attracted a lot of controversy with a lot of critics not only faulting the ICO to have been outrageously large in raising capital, EOS which was initially touted as the final Eth Killer failed to live up to its promise of dislodging ETH as the first-choice smart contract platform for developers.
United States watchdog the Securities and Exchange Commission (SEC) would later go after Block.one accusing it of violating the country’s securities law and selling unregistered investments to United States citizens. And like the current settlement option, Block.one chose to tow the same path, paying a fine of $24 million to the SEC as penalties. Many faulted this as a mere slap in the wrist saying it will continue to encourage bad behaviour from actors who might just float a token offering, raising outrageous sums and then opting for a paltry fine settlement later.
Per Block.one’s settlement for the COAP-led class-action lawsuit, the latest settlement between Block.one and the lead plaintiff was driven to ‘avoid the distraction, costs, and risks of further litigation. Although, it must be noted that both parties are yet to agree over the extent of liability and damages, the recoverable amount. The $27.5 million settlement amount will have to be ratified by the presiding judge and terms set on how the funds will be disbursed.
Block.one has attached a proof of claim form on its website for aggrieved parties to fill to register their claim amount at www.blockone-settlement.com, but it’s however, inactive at the time of writing.