Federal Court Allows Class-Action Lawsuit Against HelbizCoin Creators to Proceed
In a significant development, a United States federal court has given the green light to a long-running class-action lawsuit against the creators of HelbizCoin. The lawsuit, initially filed in 2020, alleges that Helbiz, its CEO Salvatore Palella, and its partners engaged in deceptive practices and fraudulent schemes.
The case revolves around HelBiz, an Italian electric scooter-sharing company that conducted an ICO in 2018, raising $38.6 million. The plaintiffs, a group of investors potentially totaling 20,000, claim that Helbiz made false statements and promises to manipulate the token’s value and retain most of the ICO funds for themselves.
An important development in the case is the court’s determination that the ERC-20 token issued by HelbizCoin qualifies as a security under federal law. This finding adds complexity to the lawsuit and may have implications for cryptocurrency regulation.
Hot Take: Implications for Crypto Regulation
The court’s decision to classify HelbizCoin as a security has broader implications for the regulation of cryptocurrencies. It challenges the argument that foreign-based cryptocurrency firms can evade U.S. court liability by operating outside the country.
While the lawsuit is ongoing, the court’s ruling has already had an impact, dismissing some claims against certain defendants but allowing others related to fraud, price manipulation, securities violations, and more to proceed. This case serves as a reminder that investors should exercise caution when participating in ICOs, as the regulatory landscape continues to evolve.
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