Lawsuit Against Verge Black Paper Alleges Multiple Causes of Action in Complicated Partnership
- Verge cryptocurrency, Justin Valo, and Lawrence Ballou are included in the lawsuit.
- The common-law general partnership is seemingly in violation of multiple acts involving unregistered securities.
The idea of a common law general partnership is a bit complicated, combining multiple individuals in a business agreement without certain formalities. There are many risks associated with this type of agreement, including concerns with liability for the actions of the other party. An article from TheBlock sheds light on such a partnership involving the Verge cryptocurrency, Justin Valo, and Lawrence Ballou, along with anyone involved in the Verge Black Paper. The complaint identifies Valo as a prime mover of the project.
At 21 pages, the lawsuit doesn’t even start to spell out the cause of the lawsuit, first going through the background on the involved parties. The complaint states that a man named Lawrence Ballou who developed the CoinPouch virtual currency wallet, along with a slew of LLCs known as the “Touch Titan Entities.” These LLCs are in bankruptcy with a court in Texas.
Verge Coins, as described in the paperwork, are unregistered securities that were sold to the plaintiffs. Apparently, the “partnership” already knew that the only way to safely store keys was on devices, which is what CoinPouch offers. However, it is incompatible with the Verge Coin programming. Coins were swiped from wallets due to the alleged mistake.
There are multiple causes of action in the lawsuit, including:
- Violation of the Securities Act
- Violation of the Computer Fraud and Abuse Act
- Intention of defrauding the plaintiffs by obtaining private keys
The Securities Act violation could be dismissed, as the sales were over a year ago. The Block states that the second cause of action may also be dismissed, but the claim that the partnership “knowingly and without authorization accessed a protected computer with the intent to defraud and obtained Plaintiffs’ valuable private keys” could go through.
The lawsuit includes a products liability claim, which may not work on the theft of private keys, due to the lack of damage to person or third-party property. However, the clarity over the partnership may be another cause for concern too.