UNIKRN: TOKEN HOLDER FILES CLASS ACTION LAW SUIT AFTER ICO

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UNIKRN: UNSATISFIED TOKEN HOLDER FILES A CLASS ACTION LAW SUIT!

Obviously, not only the operators of fraudulent token sale projects could be threatened with litigation. As announced yesterday, an investor dissatisfied with the performance of the UnikornGold token (UKG) filed a lawsuit in Seattle on August 13 against Unikrn and the project initiators for violating the securities regulations, demanding his Ether back.

According to the statements in the lawsuit, Unikrn deliberately and knowingly advertised the tokens as “utility tokens” to circumvent the provisions of the Securities Act of 1933: Unikrn collected 112,720 ethers worth around 31 million dollars between September and October 2017. The case is also interesting because Unikrn acquired an additional $16 million from accredited investors in October 2017 by means of a SAFT – Simple Agreement for Future Tokens.

Class Action Unikrn
Class Action UNikrn

Interestingly, the complaint is similar in several respects to ENVION and TEZOS accusations:

  • The location of the legal vehicle issuing the token in Bermuda is again disputed here with the argument of lacking economic substance (like ENVION and TEZOS).
  • As well as in the Envion and the Tezos lawsuit, extensive reference is made to the token issuer’s communication in the social media, Reddit, telegram-channel etc. during token sales, which perfectly indicate that the token issuer was or should have been aware of the investors’ speculative intentions.
  • The plaintiff also accuses the project initiators of the ongoing sale of the tokens retained, although these should actually have served to “build up” and “maintain” the community.
  • The plaintiff refers to the economic reality and that “naturally” the investment in the propagated utility token was made with the intention of making a profit and that both the token issuer and the plaintiff were aware of.
    In analogy to the Tezos case, the investors in the pre-sale also play a role in the lawsuit, who obviously consciously and manipulatively supported the MainSale in the aftermath.
Chart for UKG
Chart for UKG

Overall, it is impressive how obvious and clear it is now for the plaintiff and his arguing lawyers that the sale of the UKG utility token would have been an investment and the token issuers would have had to prepare a securities prospectus. Unikrn is represented in the trial by Perkins Cole- a prominent US law firm that became known in the ICO scene above all through the “invention” of SAFT. Obviously, the price development of the UKG (to date at 0.04 USD) may not have met the expectations of the plaintiff and thus he wants at least his ether back.

With the price situation for many of the tokens out there being very similar, it can be assumed that in the coming months this suit will very often serve as a basis for very similar arguments.

So, just let us grab some popcorns and let´s keep watching…

 

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