Seattle based e-bet sporting startup backed by Mark Cuban facing class action lawsuit after initial coin offering for violating U.S. security laws.
Lead plaintiff, John Hastings, filed the class action lawsuit against Unikrn in Washington State on August 13. The lawsuit alleges founder Rahul Sood sold unregistered securities to the public through the UnikoinGold Token (UKG).
The UKG tokens are argued by Hastings to be treated as securities since investors were led to expect they "would increase in value and become worth more than the virtual currencies invested." Hastings goes on to claim that Unikrn "crafted a flimsy façade that UKG Tokens are not securities by claiming they are 'utility tokens.'"
Unikrn also raised at least $16 million through accredited investors through an investment contract known as SAFT.
Several exchanges, including Bittrex, listed the UKG token for sale following the token sale.
The price of UKG descended from $2.00 to $0.05 at the time of the lawsuit filing.