The founders of ATBCoin have settled with a group of aggrieved investors who lost out when the coin’s value plummeted post ICO. ATBCoin LLC agreed to pay investors $250,000 to resolve claims that the startup engaged in an unregistered securities offering in 2017 in a move that will likely finish off the project.
“Fastest Blockchain in the Milky Way”
ATBCoin marketed their blockchain as being “the fastest in the Milky Way”, which had the desired effect on the masses and helped the project raise $20.4 million in the summer of 2017 during its ICO.
Things soon turned sour however when the blockchain was quickly discovered to not only be not the fastest in the galaxy but not even on Earth, with the transaction throughput failing to meet the whitepaper’s lofty expectations.
Due to these issues, hype around the project began to dissipate and the coin performed poorly on the open market, quickly becoming devalued compared to the amount investors paid for tokens. So badly did it perform in fact that a group of ICO investors, led by Raymond Balestra, filed a class action lawsuit with the U.S. District Court for the Southern District of New York a little over two months after the token launched on exchanges:
The ATB ICO was a clear offer and sale of securities because, inter alia (among other things), Defendants touted, and Plaintiff and other ATB ICO investors reasonably expected, that the ATB Coins received in exchange for their investments would be worth more than the ETH, BTC, LTC or other currencies invested.
ATBCoin Consigned to History
ATBCoin tried to get the case dismissed in March 2019 but failed, with District Judge Vernon S. Broderick finding that ATBCoin co-founders Edward Ng and Herbert W. Hoover had plausibly violated federal securities laws, further finding that ATB Coins were digital assets that qualified as securities according to the Howey test.
The $250,000 settlement will go some way to making investors whole and spells the final chapter in the sorry tale of the ATBCoin project, whose website is now offline and whose Twitter account has been dormant since October 2018.
The token price has also been flatlining since October 2018 and now rests at $0.000769, 99.91% down from its ICO price of $0.90:
