Australian ICO Advisory Sued by Group Regarding an Investment
In a moment that could establish a precedent in jurisprudence, an ICO advisory firm in Australia gets sued by a group of claimants at a time when the government is more sensitive to ICOs. Though we often hear of ICOs coming under the gavel of the law, it’s rare to see advisory firms in this particular area getting sued. In Australia, this is what’s happening to DigitalX, a company that assists ICOs with their launches.
The lawsuit was brought up by “a group of parties relating to an investment made by those parties in an initial coin offering to which [DigitalX] was an advisor,” according to a document published by the company.
The lawsuit must have been served very recently, as we could not find any reference to the case in the Federal Court of Australia’s database. The only reference we found even resembling DigitalX’s company name is a case file that had nothing to do with the proceedings referenced in the document.
DigitalX denies that it has done anything wrong, but didn’t provide any further details about the case.
“While the Company and its legal advisors continue to review and examine the claims made, the Company denies any claim of wrongdoing and, for reasons that will become apparent as this matter progresses, believes that it has strong grounds to defend any claims brought forward by these applicants. As such, the Company intends to vigorously defend this matter and protect the reputation of the Company,” DigitalX wrote in its document.
The advisory firm added that the suit’s claimants are asking for $1,833,077 plus damages.
The lawsuit comes at a time when the Australian government has been putting cryptocurrencies, especially ICOs, within its crosshairs as it decides what it wants to do with them in terms of regulation.
The Australian Securities and Investments Commission (ASIC) released a report earlier this month saying that it would “continue to focus on monitoring threats of harm” from ICOs, addressing concerns about some companies misleading investors.
Because of the increased sensitivity of the Australian government, if the Federal Court of Australia rules against DigitalX, the jurisprudence would help establish a legal precedent that could direct how institutions would scrutinize firms that provide advice to ICOs.