Australia’s ASX Listed DigitalX Faces Legal Claim Due to ICO and DigitalBTC Bitcoin Mining Business
DigitalX, The ASX-Listed Company Has Been Hit With Legal Action Due to ICO Involvement
DigitalX, the publicly listed and traded blockchain tech and consultancy firm have seen their shares slump heavily with the news that it is facing a legal claim brought in by an Australian court.
In an announcement made by the Australian Securities Exchange (ASX) this friday, the organisation says it has been served with an Originating Application and Statement of Claim in the Australian Federal Court, which has been brought forward by a group of investors involved in the Initial Coin Offering (ICO) to which it served as an advisor.
Within the legal action, the parties are claiming roughly $1,833,077 USD plus damages, according to a statement made by the company.
DigitalX has stated that it is currently reviewing the claim alongside its legal team, but it “denies any claim of wrongdoing and, for reasons that will become apparent as this matter progresses, believes that it has strong grounds to defend any claims bought forward by these applicants.”
“As such, the Company intends to vigorously defend this matter and protect the reputation of the Company.”
The moment that the news broke, shares of the company in the Perth, Australia and New York-based company had subsequently fell from a daily high of $0.092 Australian Dollars, to hit $0.08 at press time.
The company, which offers ICO and blockchain consulting services and blockchain software development, has initially started off as a blockchain mining company called DigitalBTC, and was one of the very first companies to become publicly listed, launching for trade on the ASX back in 2015.
It was within that same year that it would go on to abandon mining, especially considering there was a price slump during that time, going on to rebrand itself as DigitalX a month later as it shifted focus to consumer products, including its eventual payments app.
This series of developments isn't the first time that the company has faced the prospect of a legal battle and, in July 2016, its Co-founder, Zhenya Tsetnenko resigned after he was subsequently indicted by the United States Government for his involvement in a fraudulent text messaging scheme.