Atonomi Token, a virtual currency that was released to the market is currently facing some legal issues after being accused of selling unregistered securities.
The information was released by the recognized cryptocurrency lawyer in the community, Stephen Palley, on April 26.
NEW federal class action lawsuit in Washington State seeks return of $25 million on a joint and several basis against all defendants, arising out Atonomi token sale, alleging it was an unregistered securities offering. pic.twitter.com/cJcWZlfdMZ
— Palley (@stephendpalley) April 26, 2019
Atonomi Token Faces Legal Issues
Atonomi Token was sold as a virtual currency back in 2018. The project raised $25 million for these tokens, but it has been classified as a security as per an investigation that is currently ongoing.
The lawyer explains that a new federal class action lawsuit in Washington State seeks to return $25 million to investors. The sale has been considered an unregistered securities offering that was not registered in this way.
According to Palley, the class-action lawsuit wants to hold the members of the management team liable for judgment. According to the Plaintiff, the tokens have developed no substantive utility other than as a vehicle of investment. Moreover, defendants did not lock up the tokens for a period of 12 months.
There have been launched thousands of Initial Coin Offerings (ICOs) in the last several years. Projects were able to raise funds by selling their tokens to the market to interested investors.
However, regulatory agencies in the United States explained that most of the ICOs are considered securities and that those selling these tokens could face enforcement actions if they are not properly registered as securities offerings.
Moreover, regulatory agencies around the world are trying to better regulate the cryptocurrency and blockchain markets. One of the virtual currencies that have not yet been classified as security but could eventually be considered one is XRP.