Solana investor sues Project insider, Claims Network Highly centralized

Solana investor sues Project insider, Claims Network Highly centralized

A Solana investor has submitted a class action lawsuit Legal against important parties in the Solana ecosystem, because they are allegedly misleading and benefits from the sale of unregistered securities to private customers have.

The plaintiff, Mark Young, submitted the lawsuit on July 1st against Solana Labs, the Solana Foundation, Solana CEO Anatoly Yakovenko, the crypto investment company Multicooin Capital and its co-founder Kyle Samani as well as the Falconx trading platform.

"The defendants achieved enormous profits through the sale of SOL securities to private investors in the United States, which violates the registration provisions of the Federal and State Working Act, and investors suffered enormous losses," said Young, who said that he bought Sol-token in 2021.

The lawsuit was submitted in the name of investors who bought Solana token between March 24, 2020 and the submission date, he said.

Solana Labs, Multicoin Capital and Falconx did not answer the Blockworks for comment. Jakowenko and Samani were unavailable.

Court documents show that Young claims that the accused have spent exorbitant sums since April 2020 to promote SOL in the USA, which allegedly increased to $ 258 per token and the market value by November 5, 2021 to $ 77 billion. $

"These advertising measures made SOL securities from a relatively obscure crypto-asset one of the best crypto assets in the world," he wrote.

"Samani and Multicoin continuously whipped Solwertpapers, increased their market price from less than hundreds of dollars and continued their advertising efforts, even after it was clear that Solana had serious failures and technical problems," he added and referred to several Snafus last year, including a failure of over 10 hours in September 2021.

The plaintiff also said that the defendants had made misleading statements regarding the provision of Sol and his decentralized nature and claims that corporate insiders had a significant percentage of the tokens.

"In May 2021, insiders kept 48 % of the SOL offer. The network is therefore strongly centralized," Young said.

He claimed that Yakovenko had applied private means in several rounds by selling SOL securities at low prices. And in such a "Seed Sale" Solana sold "the future rights" of almost 80 million SOL-TOKEN for $ 3.04 ($ 0.04 per token) in April 2018. It also adds that the accused have decided to only sell a small amount of their token offer (less than 2 %) in their initial 2020 Coin offer, in which Sol-Token was rated Cryptorank .

"The defendants did this to ensure that they have in fact control over the Solana blockchain and to artificially reduce the available range of SOL securities through coordination," wrote the plaintiff.

Young also said MultiCoin benefited from inviting millions of Sol-token to small investors, while over-the-counter (OTC) trade tables like Falconx used as a broker.

Solanas SOL has dropped by 78 % this year and fell by $ 36.85 in the last month, data from Blockworks research . The losses of the token in June were spurred on by blockchain downtime, which prevented the validation of transactions for more than four hours.

YOUNG in the Northern District of California submitted case is represented by the law firm Roche Freedman and Schneider Wallace.

Roche Freedman filed numerous lawsuits against other cryptocurrency companies last year, including crypto exchanges Binance USA and Kucoin Die The execution of illegal transactions or violations of securities law in relation to tokens such as the failed stable coins VAT, EOS and TRX from Terraform Labs.

In December, Roch Freedman also secured a 100-million dollar judgment in a lawsuit against the self-proclaimed Bitcoin-creator Craig Wright.

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The contribution Solana investor sues Project insider, Claims Network "Highly Centralized" is not a financial advice.