Judge Rules Against ICO Founder in Fraud Lawsuit

5

A federal judge ruled against a blockchain startup and its founder after finding that several victims were defrauded out of potentially more than $1 million in cryptocurrencies.

U.S. District Judge Donald Middlebrooks, of the Southern District of Florida, entered a “final default judgement” against Monkey Capital LLC, Monkey Capital Inc. and founder Daniel Harrison on Tuesday after finding that Harrison had failed to deliver a working product after conducting a token pre-sale. Moreover, the judge found that Middlebrooks did not return the funds to the plaintiffs despite being asked to do so prior to the case’s filing.

A default judgement is entered when a party has “failed to plead or otherwise defend against an action,” according to the ruling.

In his ruling, the judge noted:

“Plaintiffs commenced this action against defendants, alleging they contributed cryptocurrency worth millions of dollars in advance of a scheduled initial coin offering (ICO) and supposed launch of a private cryptocurrency exchange and decentralized hedge fund (the ‘Monkey Capital Market’). Plaintiffs state that the ICO never occurred, the status of the development of the Monkey Capital Market is unknown and that defendants unlawfully pocketed investor money.”

The judge found these charges against Harrison and Monkey Capital credible, writing “defendants have utilized plaintiffs’ cryptocurrency to cover defendants’ own business expenses and enrich themselves. As a result of defendants’ conversion of plaintiffs’ cryptocurrency to their own corporate and personal use, plaintiffs have suffered damage.”

The plaintiffs are seeking roughly $1.2 million in damages combined, but Middlebrooks wrote that he would like to confirm how the damages are being calculated.

A footnote in the ruling adds that at present, each plaintiff described which cryptocurrencies and how many tokens were sent to Harrison during the sale, with victims sending bitcoin, waves, mobilego and ethereum tokens. The plaintiffs then calculated the damages by using the cryptocurrencies’ price based on CoinMarketCap on July 13, 2018.

This hearing will take place on August 24.

READ  'Ruff' Month? Dogecoin's Price Slid 36 Percent in October

Source: https://www.coindesk.com/judge-rules-against-ico-founder-in-fraud-lawsuit/


LEAVE A REPLY

Please enter your comment!
Please enter your name here