Unikrn to ‘vigorously defend’ lawsuit
Unikrn has retained law firm Perkins Coie to “vigorously defend” the esports gambling company against legal action that has been initiated by one of its investors, according to co-founder Rahul Sood.
John Hastings has filed the lawsuit in King County, Washington, against Unikrn and its founders, including Sood and Karl Flores. Sood acknowledged the lawsuit in a statement to GeekWire.
Hastings, who is seeking class-action status, alleges that the company circumvented securities law in relation to the sale of its cryptocurrency, UnikoinGold, which is supported by the Ethereum blockchain network.
UnikoinGold was launched in September for Unikrn users, allowing punters to place bets on esports titles including Counter-Strike: Global Offensive, Dota 2 and League of Legends.
“Defendants have crafted a flimsy facade that UKG Tokens are not securities by claiming they are utility tokens,” Hastings, who purchased UnikoinGold tokens with 10 Ethereum during that September offering, said in his filing, according to ESPN.
“In reality, the UnikoinGold ICO was an offer and sale of securities. Indeed, it is evident that investors were purchasing UKG Tokens with the expectation that those tokens would increase in value and become worth more than the virtual currencies invested.”
Hastings also cited a recent report by the Securities and Exchange Commission in the US that stated that the DAO Tokens cryptocurrency was subject to security laws.
UnikoinGold was listed at 30 cents per token when the initial coin offering (ICO) launched in September, but it is now valued at just under 5 cents. The ICO, which was described at the time as representing a “signal moment” for the sector, had raised nearly 113,000 Ethereum worth about $31m by October in a two-stage process spanning 112 countries.
Unikrn has a number of high-profile investors, including Mark Cuban, the owner of the Dallas Mavericks NBA franchise, and actor Ashton Kutcher.