A California judge has sided with the issuers of a video game-related initial coin offering (ICO). As a result, OPSkins, the company behind the Worldwide Asset eXchange (WAX) token, will be settling their dispute with digital currency asset managers Crypto Asset Fund and Digital Capital Management outside of court.
Crypto Asset Fund and Digital Capital Management were looking to press charges against OPSkins for allegedly violating “federal securities laws and various California state laws.”
The two reportedly bought a total of $1.2 million worth of WAX tokens, but were unable to liquidate their tokens when they reached their maximum price because OPSkins allegedly delayed the release of both Crypto Asset Fund and Digital Capital Management’s WAX tokens by four days.
“Plaintiffs watched the price of a WAX token peak at over $5 while other favored investors realized millions of dollars in profits of which Plaintiffs were deprived due to Defendants’ failure and refusal to timely release the tokens they had purchased.”
Plaintiffs also allege that Defendants withheld material information including: “that they were offering and selling unregistered, non-exempt securities,” and that “the WAX platform and the WAX token were developed for the specific purpose of facilitating Defendants’ online gambling” and are used “for underage and other illegal online gambling.” wrote Crypto Asset Fund and Digital Capital Management’s lawyers in the official court document.
However, OPSkins claimed that the case should not be settled in court since both Crypto Asset Fund and Digital Capital Management signed an arbitration agreement to settle the case outside of court.
Both digital asset managers tried to refute that claim by saying the individual who signed the arbitration agreement did not have the authority to do so. However, the judge quickly dismissed that claim after reviewing the relevant documents and the signee’s relation to both companies and subsequently deciding that the arbitration agreement was valid. As a result, the judge has decided to stay any further legal proceedings.
According to OPSkins lawyers, “An arbitration provision stating that the parties waived the right to resolve disputes between them in court, and instead would arbitrate disputes through binding arbitration, including disputes about whether the dispute was arbitrable,” was signed by the defendants. The judge has sided with OPSkins and agreed that the arbitration agreement is valid and that the dispute must be settled by an arbiter.
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