Judge Worries Plaintiffs’ Lawyers Trying to Line Their Pockets in Block.one ICO Lawsuit

Share this story:

District Court for the Southern District of New York (elbud/Shutterstock)

A judge choosing the lead plaintiff in the Block.one lawsuit has expressed concern some parties appear to be there primarily for the promise of high legal fees.

  • Earlier this week in New York, U.S. District Court Judge Lewis Kaplan said a class-action lawsuit for five investors showed a distinct lack of diligence and commitment that made them unsuitable to become the lead plaintiff in the Block.one lawsuit.
  • Known as the “Williams Group,” Judge Kaplan said the plaintiffs had submitted incomplete, inaccurate and unsubstantiated trading data that failed to show how much money they lost from investing in the EOS initial coin offering (ICO).
  • For example, trading data submitted from one of the plaintiffs shows he allegedly sold more than 3,000 eos tokens than he had actually bought.
  • Judge Kaplan added that Token Fund I, one of the plaintiffs, failed to provide evidence of trading losses and was only set up two days before it filed a motion to become lead plaintiff, suggesting it was created as a vehicle specially for this lawsuit.
  • A decision to remove a couple of plaintiffs at the last minute “raises further concerns that the application is being driven by the lawyers, rather than the plaintiffs,” Judge Kaplan added.
  • The lead plaintiff’s case represents all other plaintiffs with similar suits and is the only one that goes to court, meaning the lead plaintiff’s lawyers pick up the legal fees.
  • In the Block.one case, which alleges the EOS creator committed securities fraud, Judge Kaplan said it was possible the suit could stretch on for many years, making it a lucrative prospect for the lead plaintiff’s legal team.
  • Instead of the Williams Group, Judge Kaplan chose the lawsuit from the Crypto Assets Opportunity Fund (CAOF), which was filed in May, as lead plaintiff, saying the fund had a bigger financial interest and had actually supplied accurate and evidenced trading data.

See also: Block.one Plans to Start Voting on EOS, the Blockchain It Birthed

Read the judgement below:

Read more about…



The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Read More

All provided materials and tools are for entertainment purposes only and should never be considered financial advice. Crypto News 19 will not take any responsibility for lost funds based on investments/trades made on information found here or any linking website/affiliate. This includes all social media posts and all other communications occurring under the name Crypto News 19. You should always seek professional advice before making any investment or trade.