Initial coin offering wasn’t called securities sale
Lead plaintiff’s holdings may vary from class members’
Blockchain technology developer Block.one’s proposed $27.5 million settlement with investors who allege it should have registered its coin offering as a securities sale doesn’t merit final approval because absent class members aren’t adequately represented, a federal court in New York ruled.
The “anonymous, decentralized environment” of blockchain technology obscures the proportion of the lead plaintiff’s and class members’ purchases that were subject to US securities laws, Judge Lewis A. Kaplan said Monday for the US District Court for the Southern District of New York.
And if that proportion is lower than the proportion of other investors’ US-governed transactions compared to foreign transactions, then the lead plaintiff—a cryptocurrency investment fund—could have an incentive to settle for a lower amount than the other investors would accept, he said.
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