Trial against Block.one and the conduct of the EOS project

According to CoinDesk, the investment fund Crypto Assets Opportunity (CAOF) has launched a lawsuit against Block.one and the conduct of the EOS project in a court in New York. They accuse the company of failing to fulfill its main promise of decentralization.

In the documents submitted, the applicants allege that Block.one and its managers intentionally misled investors and artificially inflated the price of the EOS token within the ICO, which raised a total of $ 4.1 billion between June 2017 and June 2018.

Lawsuit against Block.one for breaching promises during the ICO

In the course of the proceedings, the applicants claim that EOS has always been publicly described as a decentralized project. In reality, it turned out that the 21 block producers control the ecosystem and can reverse and freeze transactions. The file mentions a statement that Pierce made in this regard in 2019 – after leaving Block.one – when he claimed that EOS was effectively controlled by a “Chinese oligarchy”.

“Block.one did not have the ability to create a decentralized EOS blockchain,”

concludes the process. The plaintiffs say that the breach of promises made at the ICO and the costly pivot to the Voice platform had a negative impact on the EOS price. This has financially affected investors, so they are seeking compensation.

Block.one reached an agreement with the SEC in September last year, agreeing to pay $ 24 million in damages for the sale of unregistered securities. This represents only 0.58% of the funds raised in the ICO, which is not a too severe punishment. Earlier this year, investors who participated in the ICO initiated another lawsuit seeking compensation from Block.one.