A U.S. judge has raised concerns about the choice of lead plaintiff in the class action lawsuit against Block.one, suggesting the case against the digital currency platform may be motivated by high legal fees rather than the pursuit of justice.
U.S. District Court Judge Lewis Kaplan told the court in New York that the class action raised on behalf of five investors in the firm shows a lack of commitment and diligence, suggesting they were unsuitable lead plaintiffs.
Referred to as the Williams Group, Judge Kaplan said the lead plaintiffs had filed incomplete and inaccurate information with the court, including unsubstantiated accusations against Block.one.
In one instance, one of the plaintiffs submitted data erroneously showing a sell-side transaction for EOS tokens, when he was actually the buyer. There is also the suggestion that one of the plaintiffs, Token Fund I, was set up specifically for the purposes of the lawsuit, having been registered just days before it filed a motion to become lead plaintiff in the case.
A move to withdraw several of the plaintiffs at the eleventh hour only heightened the suspicions of Judge Kaplan, who said this “raises further concerns that the application is being driven by the lawyers, rather than the plaintiffs.”
As lead plaintiffs, representatives for the Williams Group are the only party that will present the case in court, on behalf of all other investors party to the case. With an anticipated lengthy legal struggle set to run for possibly a number of years, representing the plaintiffs looks likely to be lucrative for the legal team involved.
Dismissing the application from the Williams Group on this basis, Judge Kaplan chose Crypto Assets Opportunity Fund (CAOF) to be lead plaintiff instead, citing their greater financial interest in the fund as well as the fact they had submitted more accurate and complete trading information.
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