Block.​One Facing Class Action Lawsuit Over EOS ICO, Again

Months after it settled with the U.S. Securities and Exchange Commission, (SEC) Block.Ene is once again facing a class action lawsuit for its $4 billion EOS ICO, according to a filing from 18 May.

According to the new complaint, investors from the U.S. are estimated to have spent around $200 million during the record-breaking EOS ICO, and are now looking to recoup their invested funds. Filed in the U.S. District Court for the Southern District of New York, the complaint names Block.one, its CEO Brendan Blumer, CTO Daniel Larimer, cryptographer and previous Block.one partner Ian Grigg and previous adviser Brock Pierce as defendants.

The complaint alleges that even though the language in the purchase agreements in EOS’s pre-sale told investors from the U.S. not to participate, some still did. The plaintiffs further accuse Block.one of providing investors with false and misleading information regarding its EOS token sale, in an attempt to raise billions.

The complaint reads:

“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.”

Although Block.one did not register the offering in the U.S., neither as a security or under an exemption from security, the firm still “aggressively courted investors” from the U.S., the complaint claims. The firm was not only revealed in a 2017 New York City conference, but also had an expensive ad space on a Times Square billboard.

Back in 2019, Block.one agreed to pay to the U.S. SEC $24 million in penalties for conducting an unregistered securities sale. At the time, the company informed its investors that its current token will not be registered as a security, as the settlement only applied to the original ERC-20 token, which has already been swapped with the proper EOS tokens.