EOS prices remained up on Thursday after a judge in the Southern District of New York rejected a $27.5 million class action settlement. In May 2020, investors filed a lawsuit against Block.one. They claim that selling EOS network tokens in the ICO is buying and selling securities. As a result, Block.one reached a $27.5 million settlement with investors.
Prolonged conflict between EOS and Block.One
Block.One issues ERC-20 tokens for a year with the promise of converting them to EOS tokens at a later date. After the completion of the ICO, Block.One ERC-20 tokens are available for sale in the United States. The lawsuit alleges that Block.One violated US federal securities laws by attempting to protect the ICO. It said the tokens do not represent an investment contract and prevented direct sales to US citizens.
Judge Lewis Kaplan of the Southern District of New York found that Crypto Assets Opportunity Fund LLC, the lead plaintiff in the lawsuit, did not properly represent the interests of all class members. The ruling recognizes the need for EOS token holders. This is probably one of the crypto projects that disappointed investors, because of the huge potential it promised.
Over a year, Block.One’s ICO for the EOS blockchain raised a record $4.1 billion in 2018. However, the EOS network failed to deliver several important milestones, resulting in poor market performance. Also, there was a long-standing dispute between the founders. This culminated in the departure (and eventual return) of one of the most influential figures in the project, Dan Larimer.
One of the reasons cited by dissenting voices inside EOS is the “distraction and mismanagement of the network” by Block.One. The EOS Network Foundation (ENF) took over control of the EOS Network, and funded the “Mandel hard fork”. At Mandel upgrade came after the ENF rose from the Community’s platform. This is the most critical step in securing the freedom of Block.One, the developer of the original EOSIO software that supports EOS.