DigitalX faces legal claims over ICO to which it was advisor

Maria Nikolova

The claim, for about US$1.83 million, relates to an investment made by a group of parties in an initial coin offering to which DigitalX was an advisor.

Blockchain-based solutions provider and ICO adviser DigitalX Ltd (ASX:DCC) has to deal with a legal claim related to an initial coin offering to which it was an advisor, the company confirmed in an announcement filed with the ASX earlier today.

In the announcement, DigitalX advises that it has been served with an Originating Application and Statement of Claim in the Federal Court of Australia filed by a group of parties relating to an investment made by those parties in an initial coin offering to which DigitalX was an advisor.

DigitalX comments:

“While the company and its legal advisors continue to review and examine the claims made, the company denies any claim of wrongdoing, and for reasons that will become apparent as this matter progresses, believes that it has strong grounds to defend any claims brought forward by these applicants. As such, the company intends to vigorously defend this matter and protect the reputation of the company”.

The claim is for a combined amount of approximately US$1.83 million plus damages.

There is no detailed information about this case at present.

Australian regulators have been rather cautious about ICOs and cryptocurrencies. In April this year, for instance, the Australian Securities and Investments Commission (ASIC) indicated a stricter stance on ICOs. ASIC Commissioner John Price noted that the regulator is determined to see Australia’s innovative fintech and regtech flourish in the right regulatory environment but he stressed that “ASIC must be focused on both protecting Australian consumers and facilitating innovation across the financial services industry”.

Mr Price warned about the opportunistic mood dominating in ICOs – including businesses or people looking to undertake an ICO because it is seen as an easy, low regulation and low cost option which could lead to immature businesses coming to market. The legal status of an ICO is dependent on the circumstances of the ICO, such as how it is structured and operated as well as the rights attached to the token.

”Regardless of the structure, however, there is one law that will always apply – you can’t make misleading or deceptive statements about the product. This is going to be a key focus for us going forward”, John Price said.

Read this next

Digital Assets

Silvergate dismisses speculation of trouble, says BlockFi exposure is minimal

Crypto-friendly bank Silvergate Capital claimed on a Tuesday blog post that it had minimal exposure to crypto lender BlockFi, which filed for chapter 11 bankruptcy protection this week.

Retail FX

Fidelity launches crypto trading for retail investors

Fidelity Investments, one of the largest brokerages in the world, has officially rolled out a commission-free crypto trading product for retail investors, starting with zero-fee trading for Bitcoin and Ethereum.

Digital Assets

ECB head calls for tougher crypto regulation after FTX collapse

President of the European Central Bank, Christine Lagarde, has called on lawmakers to start working on fresh crypto regulations to protect the financial system after the collapse of the FTX exchange.

Retail FX

CySEC updates rules for regulated brokers’ cross border activity

As CySEC’s attitude of adopting more stringent licensing guidelines and operating regulations becomes ever clearer, certain aspects of the rules and operations start to come into sharper focus.

Market News

Outlook for Gold: Can the Precious Metal Regain Power?

Gold set an all-time high at $2070 on March 08, 2022, when the price skyrocketed amid investors’ worries about the military conflict in Eastern Europe.

Crypto Insider

2022 Islamic Finance recap: as the space continues to evolve, blockchain stands to play a big part

Despite the global economy being ravaged by turmoil induced by the Covid-19 pandemic over the last couple of years, the Islamic finance industry has emerged relatively unscathed

Crypto Insider

Decentralized Exchanges and Pooled Trading Platform Applications

Decentralized exchanges are one-way blockchain companies take back the power of value creation.

Crypto Insider

How to maximize the safety of your digital tokens?

Digitalization is the future of the investment world. These are the most preferred and growing investments in the world.

Institutional FX, Interviews

FIA EXPO 2022: Interview with Trading Technologies

The derivatives trading industry has gathered in Chicago to attend the FIA EXPO 2022 on 14-15 November. 

<