A group of investors filed a lawsuit at the New York Supreme Court at Huobi cryptographic exchange, the US HBUS division and ICO's Elastos launch, Cryptobriefing reports.
The reason for the complaint is the alleged violation of the securities laws. In particular, the plaintiff Mark Owen is certain that the initial offer for the Elastos coins, which took place last year, violates Section 5 of the US Securities Act of 1933. According to that provision, all offers of securities must be regulated by the SEC.
The case states that the Elastos ICO project is an unregistered sale of securities. Similarly, according to the applicants, ELA's symbols are essentially investments that grow with the development of the Elastos ecosystem and the demand for coins on the part of consumers.
Among the exchanges where the symbol of ELA (99th CoinMarketCap) is represented, there is a large Huobi market:
The applicants claim that neither Elastos nor Huobi registered ICO with the US Securities and Exchange Commission. However, the White Paper of the project states that ELAs are utilitarian symbols used to trade and pay commissions on the Elastos network.
"The defendants obviously ignored the generally accepted US securities laws. In particular, they did not register the ELA symbols at the SEC. None of the respondents is registered with the Commission as a broker or trader who sells assets in the United States as required by law. "– say the court documents.
China's Elastos project is working on building a blockbuster Internet. In the course of ICO, held in January 2018, the project sold 2 million ELA symbols. Initially, investors were asked to block the project's coins for three years in order to receive a 6% bonus from their value. This program was subsequently abandoned.
Ron Chen, the founder of Elastos, said he intended to challenge the charges.
"Elastos considers the plaintiffs' claims to be unfounded and will actively defend their interests in court"– he said.
Recall that the Huobi US stock exchange has just started trading in fiat dollars.
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