Another month, another ICO lawsuit. This time it’s Giga Watt in the firing line, a startup whose aim is to launch a cryptocurrency mining facility. The company describes itself as “the world’s first full-service mining solution provider” and promises “turnkey mining services”. A group of investors are not impressed though, and have filed a lawsuit over project delays that they claim are costing them serious money.
Watt’s the Matter?
The plaintiffs claim to have contributed around $20 million in cryptocurrency to the Giga Watt ICO last summer. That cryptocurrency is now worth five times as much, but investors have nothing to show for it: no crypto, no Giga Watt tokens, and none of the mining equipment that was meant to be supplied.
In a court filing, the plaintiffs state their “fear that they might never be issued their tokens or see their mining machines activated, and are losing valuable time and money as defendants indefinitely delay the further development of the Giga Watt Project”.
First Tezos, Now Giga Watt
There are clear parallels to the Tezos lawsuit – or rather lawsuits, for the Breitmans are facing several. For one thing, both ICOs went to great pains to stress that their tokens were not securities. The ongoing lawsuits surrounding a number of ICOs will test the waters regarding what constitutes a security. Labeling a token as a utility token doesn’t necessarily make it one.
“Just because utility tokens might one day have a consumptive use does not remove them from being a ‘security’ prior to that use,” claims David Silver, one of the law partners who filed the Giga Watt complaint on Read More Here