EOS Price Spikes As Block.One Loses $27.5 Million Lawsuit

EOS price maintained their upward breakout on Thursday after a judge in the Southern District of New York rejected a $27.5 million class-action settlement. In May of 2020, investors filed a lawsuit against Block.one. They alleged that selling EOS network tokens in the ICO constituted the purchase and sale of securities. As a result, Block.one reached a $27.5 million settlement with its investors.

The protracted conflict between EOS and Block.One

Block.One issued ERC-20 tokens for a year with the promise that they would be converted to EOS tokens at a later date. Following the completion of the ICO, Block.One ERC-20 tokens became available for sales within the United States. The lawsuit claimed that Block.One violated U.S. federal securities law by attempting to shield the ICO. It says that the tokens did not represent an investment contract and barring direct sales to U.S. residents.

Judge Lewis Kaplan of the Southern District of New York found that Crypto Assets Opportunity Fund LLC, the lawsuit’s lead plaintiff, did not properly represent the interests of all class members. The judgement acknowledges the needs of those who hold EOS tokens. It is perhaps one of the crypto projects that have disappointed its investors, considering the huge potential it promised.

Over a year, Block.One’s ICO for the EOS blockchain raised a record-setting $4.1 billion in 2018. However, the EOS network failed to deliver a number of significant milestones, leading to poor market performance. Also, there had been long-standing disagreements among its founders. This climaxed in the departure (and eventual return) of one of the most influential figures in the project, Dan Larimer.

One of the reasons cited by opposing voices inside EOS was “abandonment and mismanagement of the network” by Block.One. The EOS Network Foundation (ENF) took over the reins at EOS Network, and funded the “Mandel hard fork”. The Mandel upgrade came after ENF raised from the platform’s Community. It was the most critical step to securing freedom from Block.One, the developers of the original EOSIO software underpinning EOS.