Unikrn ICO was backed by none other than Mark Cuban. It is a sport’s betting start-up which had launched its own initial coin offering. The initial coin offering was launched last year. Currently, it seems like the company is facing troubled waters.
John Hastings became the lead plaintiff to file a class-action lawsuit against the company. The lawsuit was not just filed against the company but also on the founder Rahul Sood. The lawsuit alleges that the founder actually sold securities through the ICO model.
According to the plaintiff, the tokens which are issued by the company can be considered as securities. This is because the token can increase in value over a period of time. They can even rise higher than the virtual currencies. This is one of the main reasons why this lawsuit has been filed.
When you look at the ICO stats, over 100,000 Ethers where accumulated with the help of ICO. At that point in time, the company was able to raise $ 31 million.
The company was founded in the year 2014. It subsequently launched its own blockchain-based platform in order to provide the visitors with the proper betting platform. It was backed by Mark Cuban who commented that it is a high risk and high reward investment. It was also listed on various cryptocurrency exchanges.
It reached a high of $ 2 earlier this year. Since then, it is fallen all the way up to $.05 where it is trading currently. It remains to be seen whether any other investors in the company through the ICO joined the lawsuit or not. Up until now, the plaintiff is alone. If indeed, those people join in as well, the trouble for the company can increase even further. This will also open up grounds for many other class-action lawsuits against companies which have raised money with the help of the ICO model.
This certainly is not good news for the cryptocurrency investors or for the companies who are using the ICO model in order to raise money. With the amount being raised by ICO’s going up more and more, this can be a risky precedent. This is one of the main problems which this lawsuit poses. It remains to be seen whether the lawsuit is accepted or whether it is rejected. Also, a lot will be dependent on how this lawsuit progresses as many more investors would be looking to file similar lawsuits against the companies involving ICOs in which they might have invested.
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