Investors File Class Action Lawsuit Against ATB Coin

Home » Investors File Class Action Lawsuit Against ATB Coin

Last week, attorneys representing ATB Coin investors filed a class-action suit in the Southern District of New York, seeking damages from ATB Coin founders Edward Ng and Herbert W. Hoover. The plaintiffs claim that ATB Coin intentionally misled investors about the technological capabilities of the ATB Coin project, the potential for investment losses, and the nature of the initial coin offering (ICO) itself. The suit argues that ATB Coin itself falls under the Securities Act of 1933, and that ATB Coin’s founders violated the law by issuing unregistered securities.

The plaintiffs are seeking a freeze of ATB Coin’s assets, with all funds raised during the ICO to be refunded to investors. The lawsuit also seeks unspecified compensatory damages and legal fees from the defendants, and requests a trial by jury.

Promoted as a “cryptocurrency designed to deliver blazing fast, secure and near-zero cost payments to anyone in the world,” ATB Coin launched its ICO back in June, offering a $1 to 1 ATB token exchange, payable in BTC, ETH, or LTC. Initially limited to a 30-day ICO window, the plaintiffs allege that ATB Coin continued to raise funds via pre-release token sales through September 8th, and withheld the release of ICO tokens until September 14th. Instead of gaining in value following the token release, the ATB Coins plummeted in price. (At the time writing, ATB Coins are currently valued at $0.47, with a total market cap of $18.6 million.)

The plaintiffs allege that ATB Coin’s founders raised between “$20,400,000 and $24,210,000” from investors, intentionally neglecting to inform them about the risks of the investment, and promising to deliver a network that was “the fastest blockchain-based cryptographic network in the Milky Way galaxy.” Given the general failure of ATB Coin to gain traction in the cryptocurrency community, plaintiffs claim that the “ATB Blockchain is not capable of such feats,” and that the ICO should never have been offered as an unregistered security under current SEC guidance for ICOs.

The ATB Coin lawsuit is the latest addition to a rapidly growing set of cases involving ICOS — Tezos and Centra Tech being other prime examples — which seemed destined to determine how ICOs and other cryptocurrency investments are treated under U.S. laws. The SEC has offered less-than-clear guidance on the topic thus far, making legal battles between investors and cryptocurrency startup founders likely until new rules are issued. Given the recent boom in ICO offerings, and a growing trend towards tokenized securities, it’s certain that developments in the ATB Coin lawsuit will be closely watched by legal observers.

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