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ATBCoin ICO Was Sale of Unregistered Securities, Class Action Says

The complaint for this class action says, early on, that many of its statements are unnecessary: It claims that ATBCoin, LLC’s initial coin offering (ICO) was an offering and sale of unregistered securities, which is illegal regardless of whether investors were defrauded. Still, it adds a number of allegations of deception “to stress the urgency and need for immediate judicial intervention…”

The class for this action is all investors in the ATB ICO who are being harmed by defendants’ actions.

The defendants are ATBCoin, founded on June 12, 2017; Edward Ng, co-founder and CEO; and Herbert W. Hoover, co-founder, who claims he is a descendant of President Herbert C. Hoover as well as the founders of the Hoover company (two unrelated families, according to the complaint), and who the complaint claims has a foreign accent.

According to the complaint, the ICO, held approximately between June 12, 2017 and September 15, 2017, brought in around $20 million in digital currency. Its purported purpose, as quoted from an ATB “Whitepaper,” was to raise capital to create a new blockchain to “deliver blazing fast, secure and near-zero cost payments to anyone in the world.”

ATB claimed that its network, to be launched on September 1, would be “the fastest blockchain-based cryptographic network in the Milky Way galaxy.” According to the complaint, it was actually launched on September 14 and the adoption of its coins and blockchain have been “virtually nonexistent” so that the value of the coins has fallen.

The complaint alleges that defendants themselves spoke of the ATB coins as an investment, for example in a press release entitled, “PR: Over 5,500 People Choose to Invest in ATB Coin.”

Coins were available initially at a rate of 1 ATB coin for $1 (later going up to as much as $2.50), payable in Bitcoin, Ether, Litecoin, or possibly other cryptocurrencies. The complaint claims that the ATB coins were a security because “Defendants touted, and Plaintiff and other ATB ICO investors reasonably expected, that the ATB Coins … would be worth more than the … other currencies.”

Defendants also stressed the potential for “profit” from the ATB coins, and a graphic announced a “Last chance to invest atbcoin.com” in a press release. Other information put out by the defendants have talked about profit or investment, and updates to ICO participants opened with “Dear Investors!” One talked about ATB’s plans of “offering its investors more opportunities to multiply their investments…” The complaint also claims that ATB coins are “investment contracts”.

The Securities and Exchange Commission (SEC) has warned those using “distributed ledger or blockchain-enabled means for capital raising, to take appropriate steps to ensure compliance” with federal securities laws. In September, it charged two companies with defrauding investors via ICOs.

The complaint claims that the ICO was the offering and sale of unregistered securities, in violation of Sections 12(a)(1) and 15(a) of the 1933 Securities Act.

Article Type: Lawsuit
Topic: Securities

Most Recent Case Event

Complaint for ATBCoin ATB ICO Was Sale of Unregistered Securities, Class Action Says

December 21, 2017

The complaint for this class action says, early on, that many of its statements are unnecessary: It claims that ATBCoin, LLC’s initial coin offering (ICO) was an offering and sale of unregistered securities, which is illegal regardless of whether investors were defrauded. Still, it adds a number of allegations of deception “to stress the urgency and need for immediate judicial intervention…” In fact, even the defendants spoke of their coins as investments and referred to their buyers as investors. The complaint claims that the ICO was a violation of the 1933 Securities Act.

atbcoin_ico_sec_compl.pdf

Case Event History

Complaint for ATBCoin ATB ICO Was Sale of Unregistered Securities, Class Action Says

December 21, 2017

The complaint for this class action says, early on, that many of its statements are unnecessary: It claims that ATBCoin, LLC’s initial coin offering (ICO) was an offering and sale of unregistered securities, which is illegal regardless of whether investors were defrauded. Still, it adds a number of allegations of deception “to stress the urgency and need for immediate judicial intervention…” In fact, even the defendants spoke of their coins as investments and referred to their buyers as investors. The complaint claims that the ICO was a violation of the 1933 Securities Act.

atbcoin_ico_sec_compl.pdf
Tags: Offering or Sale of Unregistered Securities, Securities