Centra Tech investors waited too long to file ICO fraud suit
As was seen too often in 2018, a number of initial coin offerings (ICO) were introduced for cryptocurrency projects that had no intention of ever fulfilling their goals. One of the more high-profile scams centered on Centra Tech, thanks to the support it received from boxer Floyd Mayweather and DJ Khaled, a DJ and media personality. When it was determined that the ICO was nothing more than fraud, federal authorities swooped in and arrested the coin’s founders, leaving investors high and dry. Those individuals would have preferred to see some type of restitution for their efforts, but it now appears that this may never happen, as a class-action lawsuit has been denied.
According to an exclusive report by Law360, a group of investors filed suit in Florida seeking to have their case certified as a class-action lawsuit. However, the request has been denied by U.S. District Judge Robert N. Scola, Jr, who said that too much time had elapsed. The certification bid was filed 18 months after the original claim was made and six months after the same was amended, which exceeded the allotted time.
That may not necessarily be true, though. Law360 points out that other Florida districts have a requirement that any class-action bid request has to be made within 90 days of the complaint. The Southern District, where Judge Scola hears cases, does not have that requirement.
The real motive may not have been any time constraints but, rather, Judge Scola’s belief that the filing was made intentionally at this juncture to not give the defendants a chance to oppose. He explained, “The plaintiffs’ motion offers no excuse or justification for this delay. Moreover, the plaintiffs’ delay appears to be a deliberate decision to file the motion when it would be unopposed by a defaulting defendant,” adding that, even if the request had been filed on time, there would most likely not have been enough evidence to support the awarding of class-action status to the suit.
Centra Tech’s founders, Raymond Trapani, Robert Farkas and Sohrab Sharma, were indicted on charges of securities fraud in relation to the ICO, which reportedly saw the trio capture over $32 million from investors. Mayweather and Khaled were able to walk away free and clear, with only a slap on the wrist, after admitting that their only involvement was as promoters and asserting that they played no role in Centra Tech’s operations.
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