Media: investors filed a class action lawsuit against the Huobi Exchange and the Elastos

A group of investors filed a lawsuit in the Supreme Court of New York on the cryptocurrency exchange Huobi, its US division of HBUS and on the ICO-startup Elastos, reports Cryptobriefing .

The reason for the suit was the alleged violation of securities laws. In particular, the main plaintiff Mark Owen is sure that the initial offer of the Elastos project coins, which took place last year, violates Section 5 of the Securities Law of the United States of 1933. According to this provision, all offers of securities must be regulated by the SEC.

The lawsuit states that the Elastos ICO project was an unregistered sale of securities. Also, according to the plaintiffs, ELA tokens are essentially investments that grow as the Elastos ecosystem develops and user demand for coins grows.

Among the exchanges, where the ELA token is presented ( 99th place CoinMarketCap), there is a large Huobi marketplace:

Plaintiffs allege that neither Elastos nor Huobi registered ICO with the US Securities and Exchange Commission. However, the white paper of the project states that ELA are utilitarian tokens used for trading and paying commissions on the Elastos network.

“The defendants blatantly ignored the generally accepted American securities laws. In particular, they did not register ELA tokens with the SEC. None of the respondents registered with the Commission as a broker or dealer to sell assets in the United States, as required by law, ”the court documents say.

The Chinese project Elastos is working on the creation of the Internet on the blockchain. In the course of ICO, held in January 2018, the project sold 2 million ELA tokens. Initially, investors were asked to block the project’s coins for three years in order to receive a bonus of 6% of their value. However, this program was subsequently abandoned.

The founder of Elastos, Ron Chen, said he intended to challenge the charges.

“Elastos considers the claims of the plaintiffs to be groundless and will actively defend their interests in court,” he said.

Recall, quite recently, the Huobi US Exchange launched trading pairs with fiat dollars .

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