The founders of NANO crypto network found themselves on the wrong side of the law after a class lawsuit was filed against them in a California federal court. The lawsuit names NANO as an entity, Francesco Firano, BitGrail, and four others. The lawsuit accused the developers of fraud and violation of the securities act.
The plaintiffs claim they have lost a greal deal following NANO’s actions. James Fabian, one of the plaintiffs, lost $260,00 in a hack on BitGrail platform. According to Fabian’s lawyer, NANO became liable when they violated securities laws by encouraging people to buy and store their NANO on BitGrail.
In the lawsuit, plaintiffs, led by James Fabian, stated:
“Throughout the Class Period as defined below, Defendants directed the investing public to purchase XRB through BitGrail by providing specific investment instructions and assurances that the cryptocurrency exchange was secure and could be trusted to safeguard investment assets.”
Reportedly, the current lawsuit borrows heavily from the activities of NANO developers and from the lawsuit that was withdrawn last year. In last year’s lawsuit, a plaintiff named Alex Brola had invested $50,000, which grew to $237, 000. Alex lost everything during the hack on BitGrail platform.
According to Levi & Korsinsky LLP, who are involved in the case stated that the current suit differs from last year’s lawsuit. The law firm point out that securities violation is key to the ongoing lawsuit. The plaintiffs have a high chance of winning if they can prove that NANO was acting illegally.
In the current suit, NANO has allegedly tried to distance itself from BitGrail. BitGrail initially provided a large amount of liquidity to NANO. The suits claim that the defendants have gone to great lengths to erase their involvement with BitGrail operations relating to XRB. They even funded a lawsuit against the exchange. So far, the remaining BitGrail funds are still held by Italian authorities.
The suit also cites actions that NANO has failed to take in regard to the situation. It claims that despite efforts by the NANO team to change the XRB code, the company refused to create a rescue fork to protect the plaintiffs.
The decision depends heavily on whether the courts will consider NANO’s standing with SEC. The company is not registered with the authority.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
