Launched in the summer of 2017 ICO startup Giga Watt is accused of conducting an unregistered offer of securities. The suit is filed by a group of project investors, CoinDesk writes.
In total, the plaintiffs invested more than $ 20 million in the project, which at the current rate of bitcoin exceeds $ 100 million. Giga Watt raised funds for launching the mining and creating a store for crypto currency. In exchange for invested funds investors had to get either Giga Watt tokens or mining equipment. Tokens would give investors exclusive rights to use the premises of the company without a lease for 50 years.
However, now the plaintiffs argue that the construction timelines have not been met, and pledges to repay the contributions are not met
"Many investors did not receive Giga Watt tokens, and the claimed equipment was not installed. Investors are afraid that they will never get a coin, and mining will not be launched, because Giga Watt delays development of the project for an indefinite period, "the suit said.
Washington-based Giga Watt, before launching the ICO, cooperated with law firm Perkins Coie, which was to ensure that tokens would not be considered securities. The plaintiffs, however, argue that the tokens issued for the pre-functioning network are, by their very nature, securities and fall under the rules of regulation of the Securities and Exchange Commission (SEC).