Block.one to Pay $27.5 Million to Settle Class Action Lawsuit Related to ICO – Lexology

We previously reported how, on April 3, 2020, multiple class-action law suits were filed in the Southern District of New York against a host of crypto exchanges and token issuers, including Block.one. One of those cases was dismissed, which led to five others then being withdrawn. The case against Block.one has now been settled.

At the height of the ICO craze in 2017-18, Block.one raised a record $4 billion in its ICO, much of it at a time before its flagship product — the eos.ios blockchain platform — had even gone live. It sold a billion tokens: 90% to the ICO participants and 10% to the Block.one team. The SEC sued Block.one for the sale of unregistered securities. That lawsuit was settled in 2019 , with the company paying $24 million. The April 2020 class action against Block.one alleged that the company engaged in unregistered trading of securities, misleading of investors, and improperly funneling funds to its trading arm in Hong Kong. The lawsuit further alleged that such improper conduct resulted in a sharp decline in the price of the tokens. Block.one moved to dismiss the suit on grounds, among others, that the token sales were made outside the U.S. That motion is still pending.

Under the settlement, Block.one will pay $27.5 million to end the case, subject to the court’s approval. In announcing the settlement, the company issued the following statement: “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.” That seems to be exactly what the company is doing, as Cointelegraph has reported that Block.one has announced plans to launch a cryptocurrency exchange subsidiary dubbed “Bullish Global.” It has reportedly raised $10 billion for the crypto exchange.

Content is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee similar outcomes. For more information, please visit: www.bakermckenzie.com/en/disclaimers.