DigitalX faces legal claims over ICO to which it was advisor
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.
“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.