- Block.One has agreed to settle with a group of investors who sued them in 2020
- The class action lawsuit was in reference to Block.One allegedly selling unregistered securities
- Block.One denied wrongdoing but settled for $27 million
EOS.io creator Block.One has settled a class action lawsuit by disgruntled ICO investors, agreeing to pay out $27.5 million to the lead plaintiff, Crypto Assets Opportunity Fund (CAOF). The class action suit, which was comprised of multiple suits initially filed independently of each other in 2020, alleges that Block.one misled its investors by selling unregistered securities. It also accused them of artificially inflating the price of EOS tokens. Block.one denied the allegations but claimed it was settling in order to end the distraction of the court case.
Multiple Complaints Packaged into One
The origins of the case date back to April 2020 when EOS.io ICO investors Chase Williams and William Zhang filed on behalf of anyone who bought EOS tokens during the ICO period of June 26, 2017 and June 4, 2019. A month later, CAOF and another investor, Johnny Hong, filed a similar lawsuit. The court combined the lawsuits in August 2020 and appointed CAOF as lead plaintiff, where the claim period was extended to May 18, 2020.
A settlement was agreed on May 9 but only came to light recently after the court published an update on Friday. Despite a figure of $27 million being agreed in principle, CAOF and Block.one continue to disagree on the extent of liability and damages, which will be decided by the court following any appeals.
Block.One Denies Wrongdoing
Block.One issued a statement regarding the settlement on Friday where it denied wrongdoing:
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.
Block.One was fined $24 million in October 2019 after the Securities and Exchange Commission ruled that its ICO contravened regulations laws, which adds weight to the claims made by the plaintiffs and certainly gave them confidence to pursue their case.
