according toCrypto Briefing according to
According to reports, Elastos (ELA) and Huobi may face legal action after investors who previously participated in the Elastos ICO campaign accused it of selling tokens without authorization.
According to leaked subpoena documents, the investors asked the New York Supreme Court to subpoena the Elastos Foundation and its team members, as well as Huobi and Huobi US HBUS, to respond to their complaint. The class action filed by plaintiff Mark Owen claims that Elastos ICO activity launched last year violated Section 5 of the Securities Act of 1933, which requires all securities sold to be first registered with the US Securities and Exchange Commission.
Information in the subpoena shows that the token sale was not registered with the SEC. The document states that the sale of ELA tokens is an investment that will increase in value as Elastos develops its ecosystem and user demand increases.
Neither Elastos nor Huobi has registered an ICO with the SEC, the filing said. The white paper released by Elastos shows that ELA tokens are utility tokens that can be used for value exchange and payment of network fees on the Elastos blockchain; holders are encouraged to participate in the three-year lock-up plan and get 6% return on assets.
“Defendants turned a blind eye to the well-established U.S. securities laws and failed to register ELA tokens with the SEC,” the subpoena reads.
“Defendants failed to register with the SEC as a broker or dealer to lawfully sell tokens, as required by law.”
According to the information from Tianyancha, the Elastos project was born out of Shanghai Ketai Huajie Technology Co., Ltd., and was once a star project in the currency circle. It is committed to creating a blockchain operating system. The founder Chen Rong has many years of experience in operating system research and development. He worked for Microsoft in the 1990s, returned to China to start a business in 2000, and served as the director of the Basic Software Center of Tongji University.
After the popularity of ICO in 2018, Elastos also raised funds through tokens, which was sought after by the market. At 6:00 p.m. on February 25, 2018, when Binance’s sixth round of free coin listing voting ended, Elastos (ELA) ranked first.
During the ICO event held in January last year, 2 million ELA tokens were sold. While it does not support Chinese investor participation, there are no such restrictions on U.S. citizens.
It does not support the participation of Chinese investors. Chen Rong also mentioned in his response to the White Paper on Rights Protection last year, We have always planned to make Elastos a global project. Our original plan was to allow international investors to buy on the exchange. ELA, at the same time, we also understood the need to do international marketing. But since we encountered the ban on ICO in China in September 2017, around the end of 2017, we announced that we would go international to markets other than Chinese citizens Token swap in the market.”
Therefore, Elastos, with the endorsement of a star team, has naturally attracted many American investors.
From the star of the currency circle to the evil star, Elastos has been on a roller coaster in 2018. The price of the token ELA has been falling all the way, from the initial high price of 800 yuan to less than 15 yuan now, and the market value has shrunk by more than 95%. The currency price fell, bad news came one after another, and investors trust in Elastos was also shattered a little bit.
The subpoena was not in effect at the time of this writing because officials in the case had not yet signed off on the documents received on January 31.
The defendants named in the subpoena include Elastos co-founder Feng Han, foundation chairman Rong Chen, chief marketing officer Fay Li, and North American strategist Zach Warsavage. In addition, Steven Nam, editor-in-chief of the Stanford University journal Blockchain Law and Policy and former advisor to Elastos, was also mentioned.
Chen Rong confirmed to foreign media Crypto Briefing that the Elastos Foundation has indeed received a subpoena and will contest the allegations.
Chen Rong’s attitudes in interviews with Chinese and foreign media were completely different. Why did Chen Rong confirm to Crypto Briefing that he had received a subpoena, but denied to Odaily that he had received a threatening letter from the other party’s lawyer? When Rong asked for confirmation, he found that Chen Rong had deleted his friend.
Reference article:Reference article:
