Invictus Hyperion has sued Menlo One blockchain team for allegedly inflating the value of their token in order to reel in investors. The crypto-focused investment firm sued for $75,000 as compensation for its investment stake which stood at $250,000.
Invictus, which is incorporated in the Cayman Islands, invested in Menlo Inc.’s One tokens in 2018. The VC firm claims in a 76-page court document that Menlo’s team misrepresented, misstated and presented incomplete facts knowingly in order to attract investment. The documents, filed with the U.S. District Court for the Southern District of New York, accused Menlo Corp., Menlo One and its directors of fraud.
Additionally, the Menlo One team has yet to come up with a viable product several months after its ICO despite them “throwing around blinding buzzwords to the investors.”
Menlo describes its platform as a framework for making decentralized applications as fast and easy to use as their centralized predecessors. The company claims on its website to have partnered with companies such as decentralized e-sports platform Bitgamer, crypto bounty hunting platform Bounty0x and NuMundo, a platform that facilitates sustainable communities.
Part of the lawsuit stated, “Defendants pocketed large sums of money for their promotional efforts, and—due to their many misrepresentations, factual omissions, and unlawful action—[Invictus Hyperion] will not see any return on its investment. The Defendants, as insiders, enriched themselves at the expense of their investors.”
Invictus sued the crypto startup for $75,000, just over a quarter of their initial investment. Following a pump-and-dump scheme which saw the One token lose over 90% of its value, its total market capitalization stands at $179,000, way below the Invictus investment.
Invictus further accused Menlo of selling unregistered securities, a charge that Menlo has denied in the past. Part of the lawsuit read, “Based upon current legal standards, MET/One Tokens are ‘securities’ subject to federal and state securities laws and should not be allowed to be traded on U.S. exchanges because they were not properly registered and were not exempted from such registration.”
However, in the past, Menlo has stated that after seeking legal counsel, it determined that its tokens aren’t securities. In a blog post, the company stated, “In the opinion of Menlo One and our legal counsel, no our token does not meet the requirements to be considered a security. We consider our One token a product, not a security.”
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.