A United States court judge has recently raised concerns over the selection of lead plaintiff for the Block.one initial coin offering (ICO) class-action lawsuit as many seem to have come forward due to the promise of high legal fees.
First reported by Coindesk, District Judge Lewis Kaplan said that as many as five investors, who are willing to be the lawsuit’s lead plaintiff, showed a lack of interest in the case.
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In a class-action lawsuit, the lead plaintiff represents all other plaintiffs in the court. That means, the lead plaintiff picks the lawyers and handles the legal fees as well.
A group of investors, called the “Williams Group,” has submitted incomplete and inaccurate trading data for the tokens received in the ICO, and the number of tokens sold by the group, in its report, even exceeded by 3,000 tokens bought during the token sale.
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Another plaintiff, Token Fund I, was formed two days before it filed a motion to become the lead plaintiff and could not even provide exact details of its trading.
“When a group applies for the lead plaintiff role, considerations relevant to the adequacy inquiry for PSLRA purposes ‘include whether the group’s members have a pre-existing relationship, whether they have cooperated effectively thus far, and whether they have a coherent plan for dividing responsibilities, resolving conflicts, and managing the litigation,’” the motion added.
A billion-dollar ICO without legal clarity?
Block.one is facing multiple class-action lawsuits in the US court as the investors are alleging that the promoters of the project have committed fraud by selling unregistered securities.
The judge has picked Crypto Assets Opportunity Fund (CAOF) as the lead plaintiff, saying it has a larger financial interest in the lawsuit and also provided accurate details.
Block.one raised over $4.1 billion in an ICO lasted for a year. Last October, the Securities and Exchange Commission (SEC) settled with the crypto project for a fine of $24 million, 0.0058 percent of the total raised sum.