Paragon Coin Class Action Lawsuit Poised to Move Forward

Paragon Coin, and its affiliated initial coin offering, is pretty emblematic of the ICO heyday when any token could raise money based largely on a white-paper and effective marketing campaign. While it is hard to accurately discern, Paragon issued the PRG token raising around $12 million dollars, according to some reports, to create a Cannabis payment platform and real estate investment firm. Today, that same PRG token actually trades (it seems) at around $0.0028. Really, less than zero. At one point, PRG spiked to a market cap of over $350 million in a clear pump ploy.

Paragon benefited by the effective marketing of co-founder and CEO Jessica Versteeg, a former model and once Miss Iowa. Her husband, Egor Lavrov, was part of the project but Versteeg was the highly visible face of the firm.

As with most all post-DAO SEC statement ICOs, Paragon was the target of a Securities and Exchange Commission (SEC) enforcement action due to its claim that PRG was an unregistered security.

In brief, Paragon was required to return all funds raised to impacted investors while paying a fine for its transgressions. Lavrov described the settlement as “making history” as he attempted to put a positive spin on the outcome. It appears that Paragon Coin started the refund process but what is not clear is whether any money was returned from the ICO.

 

As may have been predicted, Paragon Coin eventually filed for bankruptcy leaving little left of the startup.

A statement by Paragon Coin on its now empty website declared:

“Our goal was to build a much-needed decentralized solution for the cannabis industry, however, our plans were impossible to achieve due to several legal mistakes. We never considered ourselves experts in the matter of US securities, therefore we sought out the guidance of highly recommended lawyers that were supposed to help, unfortunately they misguided and failed us. We did our best to launch the product, but most of our resources were allocated to legal battles and compliance requirements. After a strong consideration and evaluation of the current situation, we are sorry to announce that we are filing for bankruptcy.”

Today, a class action lawsuit is moving forward naming Paragon Coin, Versteeg, Lavrov, rapper Jayceon Terrell Taylor, also known as “The Game,” and others in the legal filing. The lawsuit alleges that “Defendants violated U.S. securities laws by unlawfully offering the sale of unregistered PRG securities, by misrepresenting the true nature of Paragon Coin, Inc. and PRG, and by artificially propping up the value of PRG through manipulative trading efforts.”

The law firm of Levi & Korsinsky is leading the legal action that is taking place in the US District Court, Northern District of California. Versteeg has been rather quiet these days with some claiming she is now living outside the US. In fact, one SEC letter to Versteeg was sent to an address in Gibraltar. Who knows. What we also do not know if investors will receive any of their money back.

 

 

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