Stephen Palley, a prominent lawyer in the crypto community posted a tweet thread detailing the Federal Class Action lawsuit which Atonomi Token was facing for the alleged sale of an unregistered security.
The crowd sale for Atonomi Token took place in mid-2018 and it raised $25 million, however, the token has been classified as a security according to the on-going investigation.
Palley’s thread stated that the class-action lawsuit would take place in the state of Washington DC.
NEW federal class action lawsuit in Washington State seeks return of $25 million on a joint and several basis against all defendants, arising out Atonomi token sale, alleging it was an unregistered securities offering. pic.twitter.com/cJcWZlfdMZ
— Palley (@stephendpalley) April 26, 2019
“long discussion of the SAFT — it was an investment contract and according to plaintiffs the defendants should have registered with Washington State or the Feds and didn’t.”
Furthermore, his tweet mentioned that the goal of the class-action lawsuit was to “seek and hold the members of the management team liable” for judgment. The Plaintiff alleged that:
“As of the date of this complaint, the Atonomi Tokens have developed no substantive utility other than as a vehicle of investment.”
The plaintiff also claimed that the defendants failed to lock up the tokens for a period of 12 months. Since the case is a class-action lawsuit, there are a number of people waiting to join the plaintiff. A Twitter user @jaraedpolites commented:
“Our group lost $250k in @atonomi, there are a ton of mishaps outside of the unregistered offering to discuss. Is it possible to join this class action?”
Another user @RestisLawFirm replied:
“You should talk to a class action lawyer. There will be many jumping in the case, and large institutional plaintiffs like yours will likely gain control of the case.”
This is not the first time tokens have been being classified as a security offering, Ripple and XRP are also being sued in a class action lawsuit, which has been ongoing for a couple of years.
A Twitter user @LarssonFuture commented:
“Will be very interesting to see how this one goes! Many ICOs used the same SAFT contract..”