EOS Network Foundation (ENF) founder and CEO, Yves La Rose, has announced that ENF is preparing a lawsuit against Block.one (B1), the creator and original seller of EOS (EOS), for its failure to fulfill its promise of investing $1 billion following its $4.1 billion raise in 2018. According to La Rose, this legal action could potentially lead to higher compensation for the plaintiffs involved.
The Consequences and Choices Faced by Investors
One of the consequences of this new lawsuit is that investors who have already joined another class action against Block.one might need to consider opting out of their current lawsuits. La Rose stated that investors would opt out if they are dissatisfied with the current settlement offer and believe that their interests are better served by doing so. However, he cautioned that opting out also carries a risk of receiving nothing in return, as there are no guarantees. Ultimately, the decision to opt out or not should be made after consulting with personal legal counsel.
La Rose expressed his belief that the current settlement amount in the class action might not be enough for those who were affected. He criticized Block.one’s offer of $22 million as “pathetic” considering the damages caused by the $4 billion raise. He argued that this new lawsuit would expand the pool of potential participants and seek a higher payout for the affected investors.
The Decline and Market Position of EOS
EOS’s initial coin offering (ICO) in 2018 raised an impressive $4.1 billion, making it one of the largest crowdfunding campaigns in history. However, the cryptocurrency’s value has since experienced significant volatility. By the end of its year-long crowdsale, EOS was trading at a substantial decline from its peak price in April 2018, and it eventually plummeted to below $1. Currently, EOS is trading at approximately $0.74, a 30% decrease over the past year. Despite this decline, EOS remains one of the top cryptocurrencies by market capitalization, with a value of $827 million, making it the 54th largest coin according to CoinGecko.
In 2019, Block.one settled with the United States Securities and Exchange Commission (SEC) by agreeing to pay a $24 million civil fine over charges of conducting an unregistered ICO. Later that year, disgruntled investors initiated a class-action lawsuit against Block.one, alleging that the firm had deceived tokenholders about its financial history, operations, and budget, as well as executive compensation and other essential factors.
The EOS community founder’s planned lawsuit against Block.one reflects the dissatisfaction among investors affected by Block.one’s failure to invest the promised $1 billion. This legal action aims to provide higher compensation to the plaintiffs and broaden the pool of potential participants. With EOS’s declining value and a previous legal settlement, the current class action’s settlement offer is deemed insufficient by many. The outcome of this new lawsuit could have significant implications for both Block.one and the affected investors.