Mark Cuban-Supported Unikrn ICO Sees Class Action Lawsuit For Breaking SEC Rules Allegedly
Class Action Lawsuit Alleges Mark Cuban Backed Unikrn ICO Of Breaking SEC Rules
Seattle based e-sport betting startup Unikrn is facing a class action suit that accuses it of violating securities law in the U.S. The Marc Cuban backed company had concluded their ICO last year.
John Hasting’s Lawsuit Against Unikrn
The plaintiff in this case, Las Vegas resident John Hastings, put 10 Ethereum into Unikrn’s ICO last September, which would have been worth about $2,800 that day, according to CoinMarketCap. This week, Hastings registered a lawsuit in King County Superior Court seeking class-action status against Unikrn; a Bermuda subsidiary of the company; CEO Rahul Sood, a former general manager of Microsoft’s investment arm; and Chief Marketing Officer Karl Flores.
Hastings goes on to argue that
“in reality, the UnikoinGold ICO was an offer and sale of securities. Indeed, it is evident that investors were purchasing UKG Tokens with the expectation that those tokens would increase in value and become worth more than the virtual currencies invested.”
In his lawsuit, Hastings cites several statements from executives that he argues the point to the acknowledgment of the currency as an investment. UnikoinGold is listed on major exchanges giving it a price in U.S. dollars, which has sunk from $0.30 when the Unikrn ICO began last year and its value has fallen to just under a nickel.
The success of Unikrn
Notably, Unikrn has been pretty successful since it was launched in 2014. They planned last year to launch its own token for a blockchain-based betting platform and subsequently conducted the ICO to raise funds for the project's development. The ICO was notably backed by “Shark Tank” VC Mark Cuban, who confirmed his participation in the offering – a first for the owner of the Dallas Mavericks NBA franchise. “High risk. High reward,” he commented at the time.
In addition to its ICO, Unikrn has also raised $10 million in venture funding from Cuban and others like Ashton Kutcher, Binary Capital, and Indicator Ventures. The company employs about 90 people in offices in Seattle, Berlin, Sydney, and Las Vegas. It was named a Seattle 10 startup in 2015, recognizing its status as one of the region’s most promising startups.