The latest legal action against Block.one (B1), the creator and original seller of EOS, has the potential to secure higher compensation for plaintiffs, according to Yves La Rose, the founder and CEO of the EOS Network Foundation (ENF). On July 25, La Rose officially announced that ENF is preparing a lawsuit against Block.one for its failure to honor its commitment of $1 billion following its $4.1 billion raise in 2018. He argued that Block.one’s broken promises to invest $1 billion have caused major issues for the EOS community, and he promised to hold the firm accountable.
As many investors have already been part of another class action against Block.one, some may choose to opt out of their current lawsuits. La Rose explained that they might do so if they are not satisfied with the current settlement offer and believe their interests would be better served by opting out. However, he cautioned that while opting out could potentially result in a higher payout, it could also mean receiving nothing. Therefore, he recommended that individuals consult their own legal counsel to determine the best course of action for them.
La Rose also highlighted that the amount of settlement in the current class action might not be sufficient for those who were affected. He criticized Block.one’s offer of $22 million as “pathetic” considering the damages caused by the $4 billion raise. He stated that the new lawsuit would widen the pool of potential participants who were not covered in the current class action.
Block.one’s initial coin offering (ICO) for EOS became one of the largest crowdfunding raises in history, raising $4.1 billion by June 2018. This amount exceeded Telegram’s $1.7 billion ICO. However, by the end of its year-long crowdsale, the price of EOS had dropped by around 44% from its peak price recorded in April 2018. The cryptocurrency experienced fluctuations and eventually plummeted below $1. At present, EOS is trading at $0.74, representing a decrease of approximately 30% over the past year.
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Despite the significant decline in value, EOS remains one of the largest cryptocurrencies by market capitalization, amounting to $827 million. It currently ranks as the 54th largest coin by market value.
In 2019, Block.one agreed to pay a $24 million civil fine to settle charges with the United States Securities and Exchange Commission over its unregistered ICO. Subsequently, disgruntled investors initiated a class-action lawsuit against Block.one, alleging that the firm had deceived tokenholders about its financial history, operations, budget, executive compensation, material trends, risk factors, and more.
The new lawsuit initiated by ENF aims to compensate those who were affected by Block.one’s failure to follow through on its commitment. By widening the pool of potential participants, ENF hopes to secure a more substantial settlement for those who suffered losses. However, the outcome is uncertain, and individuals should seek legal counsel to make an informed decision.
This legal action against Block.one is another development in the ongoing controversy surrounding EOS. Despite its initial success as a crowdfunding project, the project has faced challenges and criticisms. The outcome of this lawsuit may shed light on the accountability of blockchain projects and their responsibilities towards their community and investors.
