Developers of the cryptocurrency Nano have petitioned a court in California for $701,000 in damages following the withdrawal of a class action lawsuit, which its founders described as “legally baseless.”
The claim brought by token purchaser Alec Otto and the class action around it was filed too late, according to the developers, and was made of allegations unsubstantiated by the evidence, “advanced a series of absurd” arguments that were without clear legal basis.
Under securities law, the developers argued, there was no cause for sanctions to be brought against Otto and his counsel, following the withdrawal of the claims against Nano.
Amongst other things, Otto had accused the team behind Nano of committing fraud, as well as violating securities laws and conducting a number of other offenses, concerned with the loss of millions of Nano tokens following a hack from the BitGrail exchange.
After deliberation and delay on behalf of Otto in obtaining class certification, counsel moved to dismiss the suit. This came with a request to hold a round of briefings to determine whether sanctions against Otto and his counsel would be appropriate.
According to the defendants in the case, Otto’s testimony revealed several key deficiencies of argument.
“It became clear from Mr. Otto’s deposition testimony that his counsel made up the dates and amounts of XRB Mr. Otto was alleged to have purchased on BitGrail and the amount he was alleged to have lost as a result of the exchange’s closure.”
“Mr. Otto’s deposition testimony revealed that he has no idea how many XRB he purchased, when he purchased them, or how many were left on BitGrail when it closed.”
It remains to be seen whether Nano can secure the damages it seeks in connection with the case.
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.