Nano Team Slapped with Class Action
Nano’s team has been pegged with a class action lawsuit.
The suit, filed by plaintiff Alex Brola on behalf of Nano/Raiblocks investors, targets Nano’s core team, namely, Colin LeMahieu, Mica Busch, Zack Shapiro, and Troy Retzer.
The lawsuit alleges that the defendants violated federal securities laws and mislead investors into using Bitgrail exchange to trade and store their assets. Originally launched as Raiblocks, Nano is a cryptocurrency that utilizes DAG algorithms to deliver instant, low-fee transactions. While many in the community touted its block-lattice technology and protocol as the answers to quick payments and scalability, the coin was limited to three exchanges when it was first introduced.
That didn’t stop it, though, from appreciating from $0.20 to $32 over the course of December, 2017. The majority of this trading volume, the class action points out, took place on Bitgrail, an Italian exchange that was supposedly built with Nano in mind and which the team allegedly promoted to its users.
This promotion has given the class action its fodder, as $170mln worth of XRB disappeared from Bitgrail back in February of this year, either by way of a hack or a double-spending withdrawal vulnerability. According to the lawsuit, “in their push to introduce XRB to a wide market of investors, [the defendants] recklessly directed investors to open accounts and place their assets with a little known, and severely troubled, Italian cryptocurrency exchange called BitGrail.” As such, the “Complaint alleges Nano and its core team engaged in an unregistered offering and sale of securities that violated federal securities laws, including Sections 5, 12(a), and 15 of the Securities Act of 1933, and wrongly ushered investors to BitGrail.”
The suit also condemns the team for withholding potentially tens of millions of XRB for themselves, with Colin LeMahieu, the project’s head, holding the lion’s share of these coins.
As recompense for the lost funds, the suit “pleads that the Court rescind the plaintiff class’ investments in XRB and require Nano to ‘rescue fork’ the allegedly missing XRB into a new cryptocurrency in a manner that would fairly compensate the class of victims.” After discovering that funds had disappeared from the exchange, Francesco Firano, Bitgrail’s founder, solicited the team to execute a hard fork to recover the lost assets. The team refused, arguing that they should not have to compensate for Firano and Bitgrail’s shortcomings.
Silver Miller Law, the firm representing Brola and other investors, brands itself as America’s “leading cryptocurrency investor law firm.” In addition to this developing class action, Silver Miller Law and its clients have “actions pending against the Coinbase, Kraken, BitConnect, and Cryptsy exchanges” including “lawsuits against pre-functional token ICO promoters Monkey Capital and Giga Watt.”
Peter Scoolidge, the team’s attorney, commented on the class action with the following: “We have reviewed the complaint and we find the claims to have no merit. We look forward to addressing it in court.”
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