e-Sports Betting Startup Unikrn Hit By Class Action Lawsuit
Unikrn, a Seattle-based e-sport betting platform is facing a new class-action lawsuit. The case accuses the company of violating securities law in the United States. The suit relates to Unikrn’s Initial Coin Offering (ICO) in 2017.
Unikrn Accused Of Selling Unregistered Securities
John Hastings, a resident from Las Vegas decided to file the case at a court in Washington. As per accusations presented on August 13, Unikrn has been selling unregistered securities. The lawsuit includes Unikrn’s founder Rahul Sood, who sold UnikoinGold Tokens (UKG) via the ICO last year.
According to Hastings, UKG tokens should be considered securities. Investors were expecting the tokens to increase in value and be worth more than the funds initially invested.
Additionally, he explained that Unikrn ‘crafted a flimsy façade that UKG Tokens are not securities.’ Founder Sood commented that Unikrn is aware of the lawsuit but did not expand on the matter.
Unikrn’s ICO collected 112,720 Ether from the public between September and October 2017. The amount gathered was worth over $31 million dollars at that time.
The firm submitted a file to the U.S. Securities and Exchange Commission (SEC) on October 6 informing that they raised at least $16 million dollars from other accredited investors. The mechanism for this investment was through a Simple Agreement for Future Tokens (SAFT).
‘Shark Tank’ VC Mark Cuban backed the ICO and confirmed his participation in the offering. About it he said that it was a high-risk investment with a high reward.
Bittrex, one of the most important virtual currency exchanges in the market, listed UKG tokens.
At the moment of writing, each UKG coin can be bought for $0.05 dollars. At the beginning of the year, it reached an all-time high of $2.18 dollars. According to CoinMarketCap, it has a market capitalization of $7.2 million dollars.
The ICO market has been full of scams and non-compliant projects. Several of them are currently facing problems. This may be a step toward the market receiving clearer regulations to protect investors and allow projects to focus on growth.
Photo courtesy of smartcoininvestor