- The EOS Foundation is seeking $4.1 billion in damages from Block.one over the company’s handling of the 2017 EOS initial coin offering.
- EOS block producers had previously voted to halt token distributions to Block.one after failing to reach a compromise with the firm.
- The EOS Foundation has retained a leading Canadian law firm to investigate Block.one’s past actions and take the company to court.
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The EOS Foundation is planning to pursue legal recourse against EOS backer Block.one. The foundation is seeking $4.1 billion in damages for “negligence and fraud” on the part of Block.one following the EOS initial coin offering in late 2017.
EOS Foundation to Take Block.one to Court
The EOS community is seeking legal recourse against Block.one.
EOS Foundation CEO Yves La Rose announced Thursday that the organization wants to take Block.one to court over its handling of the EOS initial coin offering in 2017. In a tweet revealing the foundation’s intentions, Rose stated that he shared the frustrations of the EOS community and that legal recourse to seek $4.1 billion in damages is underway.
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As Founder of @EosNFoundation I share your frustrations! We are taking further steps to hold @B1 accountable for its past actions and broken promises against #EOS. Review of ALL possible legal recourse to seek $4.1B in damages underway. Let’s do this together! #4BillionDAO coming
— Yves La Rose (@BigBeardSamurai) February 10, 2022
Block.one is the company that helped EOS conduct its 2017 ICO, raising over $4 billion through public sales of the EOS token. However, many in the EOS community believe that Block.one is responsible for the EOS token’s lacklustre performance over the past five years (EOS peaked at $22.71 in April 2018 and has struggled to maintain momentum since; it’s now 88% down from its high). “Block.one knowingly misrepresented their capabilities, and this amounts to negligence and fraud,” said Rose during a speech to foundation members in November.
In December, EOS block producers voted to stop issuing vested EOS tokens to Block.one, depriving the firm of a future 67 million EOS tokens scheduled to be unlocked over the next six to seven years. In a blog post released in tandem with the decision to take legal action against Block.one, the EOS Foundation stated:
“In November and December 2021, we engaged in negotiations with Block.one to attempt to arrange a fair and reasonable resolution… Unfortunately, Block.one decided to walk away from the negotiations, and as a result, the EOS Block Producers determined it was in the best interest of the community to freeze the vesting of all the EOS tokens that Block.one was to earn in the future.”
However, for many in the EOS community, freezing Block.one’s tokens is insufficient. The EOS Foundation stated today that it had retained a leading Canadian law firm to investigate Block.one’s past actions and take the company to court. “The EOS Foundation promises vis-à-vis the EOS community and EOS investors to determine what legal avenues are available to seek redress,” the foundation explained.
It is still too soon to judge how successful the EOS Foundation will be in taking legal action against Block.one. However, the move will help further reduce Block.one’s influence over EOS, something the EOS community will likely welcome.
Disclosure: At the time of writing this feature, the author owned ETH and several other cryptocurrencies.
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