Major crypto exchange Huobi and creators of Elatos are facing a lawsuit after investors of ELA ICO have accused them of hosting unauthorized security sale.
What are the Charges?
The ELA ICO, as well as continuous follow-on sales of securities to the U.S. market conducted by the defendants, are public offerings of securities as defined under federal securities law. Accordingly, the defendants were required to register the ELA Securities with the United States Securities and Exchange Commission pursuant to Section 5 of the 1933 Securities Act.
The defendants dismissed these well-established U.S. securities laws by, inter alia, failing to register ELA Securities with the SEC. No defendant in this action was registered with the SEC as a broker or dealer as required by law to legally sell securities in the United States.
Relief Sought: By virtue of the foregoing, plaintiff, on behalf of himself and the proposed class, seeks an order of rescission of the investments made by plaintiff and the proposed class relating to the ELA ICO and additional direct sales by the defendants, and/or incidental damages and consequential damages together with interest thereon, in an amount not less than $200,000,000 dollars.
What the Defenders Have to Say?
Rong Chen, the founder of Elastos Foundation said:
“The lawsuit purports to bring suit on behalf of individuals who allegedly purchased Elastos tokens in the United States, alleging, among other things, that the issuance of ELA tokens was a public offering of unregistered securities in violation of Sections 12(a)(1) of the Securities Act of 1933. Elastos believes that the claims made by the plaintiff are without merit and will vigorously defend against them.”
Other defenders include Elastos co-founder, Feng Han chief marketing officer Fay Li, and North American strategist, Zach Warsavage. Steven Nam, the managing editor of Stanford Journal of Blockchain Law & Policy, and a former advisor to Elastos.
A lawsuit doesn’t mean that there were any wrongdoings on the defendant's part. Anyone can file a suit for anything in America, such is the life of our litigious society. Let's wait and see if the courts even take the case. Do yourself a favor and look at the articles on Yahoo Finance for any stock that's been underperforming. The top headlines are always about some class action suit being filed because novice investors are salty and somehow thought investing meant guaranteed returns. In any case, almost none of the cases ever make it to court.