EOS Network Foundation (ENF) founder and CEO, Yves La Rose, has announced the organization’s intention to file a lawsuit against Block.one, the creator and original seller of EOS. This legal action comes in response to Block.one’s failure to deliver on its promise to invest $1 billion, following its impressive $4.1 billion raise in 2018. La Rose argues that the broken promises have had a detrimental impact on the EOS community and believes that Block.one should be held accountable.
As many investors are already part of an existing class action against Block.one, some may consider opting out of their current lawsuits. La Rose suggests that by doing so, investors may have the opportunity to secure a higher payout. However, he also highlights the possibility of receiving no compensation at all. The decision to opt out should be carefully considered and, in order to make an informed choice, the ENF founder recommends consulting with a legal counsel.
La Rose emphasizes that the current settlement in the class action may not adequately compensate those affected. He criticizes Block.one’s offered settlement amount of $22 million as “pathetic” compared to the damages caused by the $4 billion raise. The contemplated lawsuit aims to expand the pool of potential participants and seek fairer reparations for those impacted.
A Look at EOS’s Crowdfunding Journey
Block.one’s EOS initial coin offering (ICO) made waves in the cryptocurrency space, becoming one of the largest crowdfunding raises in history. The ICO raised a staggering $4.1 billion by June 2018, surpassing Telegram’s $1.7 billion ICO. However, the value of EOS experienced significant volatility, with prices dropping to around $12 by the end of the crowdsale, representing a 44% decline from its peak in April 2018. Over time, the cryptocurrency faced further turbulence, plummeting to under $1. Currently, EOS is trading at $0.74, marking a 30% drop over the past year.
EOS’s Market Position
Despite the notable decline in value, EOS remains one of the largest cryptocurrencies by market capitalization. CoinGecko reports its market value at $827 million, positioning EOS as the 54th largest coin in the market. This highlights the ongoing relevance and potential of the digital asset.
In 2019, Block.one reached a settlement with the United States Securities and Exchange Commission (SEC), agreeing to pay a $24 million civil fine for conducting an unregistered initial coin offering. This settlement followed a class-action lawsuit filed by disgruntled investors who accused Block.one of deceiving tokenholders about its financial history, operations, budget, executive compensation, material trends, and risk factors.
The EOS Network Foundation’s decision to pursue legal action against Block.one underscores the dissatisfaction felt by the EOS community and investors. By seeking higher compensation, they aim to rectify the broken promises and hold Block.one accountable for its actions. As the legal proceedings unfold, the outcome will have significant implications for both the affected investors and the wider cryptocurrency industry.