DFINITY wins dismissal of class action lawsuit over the Internet Computer Project (ICP) token

On Tuesday, U.S. District Judge James Donato dismissed a class action lawsuit against DFINITY, the crypto company behind Internet Computer (ICO). The judge found the case “time-barred” under the Securities Exchange Act’s three-year statute of repose.

U.S. District Judge James Donato has dismissed a class action lawsuit against crypto company DFINITY and its executives, finding the case "time-barred." The lawsuit, which was first filed in August 2021, accused DFINITY of selling unregistered securities and making false statements about its Internet Computer Project (ICP) tokens.

However, Judge Donato, who is based in California, dropped the case against DFINITY on March 25, granting the company’s motion to dismiss. The judge found that the case was "time-barred" as it exceeded the three-year statute of repose in the Securities Exchange Act.

The case began when California resident Daniel Ocampo filed the complaint "on behalf of all investors who purchased Internet Computer Project tokens on or after May 10, 2021."

The plaintiffs argued that DFINITY's ICP tokens were securities that were sold in an unregistered offering. They also claimed that DFINITY made false and misleading statements about its business and technology, which induced investors to purchase ICP tokens at artificially inflated prices.

DFINITY argued that its ICP tokens were not securities and that its public offering of the tokens began in February 2017 with the launch of its open-chain network. The company also argued that the plaintiffs' claims of fraud were not sufficiently pleaded.

Judge Donato agreed with DFINITY on both points. He found that the plaintiffs' claims of fraud were "not sufficiently pleaded to satisfy the heightened pleading standard for federal securities fraud claims."

The judge also noted that the plaintiffs did not allege with sufficient reliability any sources for the assertions attributing statements to DFINITY employees or the level of intent to commit securities fraud.

"Plaintiffs' allegations that founder Dominic Williams ‘necessarily had knowledge' of the issues with the token distribution are not specific enough to satisfy Section 12(a)(2) and 12(b) of the 1933 Act," Judge Donato wrote.

The case began when the founders of defunct crypto law firm Roche Freedman were accused of leveraging litigation to gather confidential information on crypto firms.

After the founders of the firm went to court fighting over $60 million worth of tokens issued by Ava Labs, the complainants, now under the counsel of Selendy Gay PLLC, had alleged that DFINITY manipulated the digital asset market and inflated ICP token prices after its May 2021 trading debut.

The case ends Tuesday with Judge Donato granting plaintiffs a final chance to amend their complaint by April 8 or face dismissal under federal rules on civil procedure.

The post Judge dismisses Dfinity lawsuit over jurisdiction parameters appeared first on Chain Teller.output: On Tuesday, U.S. District Judge James Donato dismissed a class action lawsuit against crypto company DFINITY and its executives, finding the case “time-barred.”

The lawsuit, which was first filed in August 2021, accused DFINITY of selling unregistered securities and making false statements about its Internet Computer Project (ICP) tokens.

However, Judge Donato, who is based in California, dropped the case against DFINITY on March 25, granting the company’s motion to dismiss. The judge found that the case was “time-barred” as it exceeded the three-year statute of repose in the Securities Exchange Act.

The case began when California resident Daniel Ocampo filed the complaint “on behalf of all investors who purchased Internet Computer Project tokens on or after May 10, 2021.”

The plaintiffs argued that DFINITY’s ICP tokens were securities that were sold in an unregistered offering. They also claimed that DFINITY made false and misleading statements about its business and technology, which induced investors to purchase ICP tokens at artificially inflated prices.

DFINITY argued that its ICP tokens were not securities and that its public offering of the tokens began in February 2017 with the launch of its open-chain network. The company also argued that the plaintiffs’ claims of fraud were not sufficiently pleaded.

Judge Donato agreed with DFINITY on both points. He found that the plaintiffs’ claims of fraud were “not sufficiently pleaded to satisfy the heightened pleading standard for federal securities fraud claims.”

The judge also noted that the plaintiffs did not allege with sufficient reliability any sources for the assertions attributing statements to DFINITY employees or the level of intent to commit securities fraud.

“Plaintiffs' allegations that founder Dominic Williams ‘necessarily had knowledge' of the issues with the token distribution are not specific enough to satisfy Section 12(a)(2) and 12(b) of the 1933 Act,” Judge Donato wrote.

The case began when the founders of defunct crypto law firm Roche Freedman were accused of leveraging litigation to gather confidential information on crypto firms.

After the founders of the firm went to court fighting over $60 million worth of tokens issued by Ava Labs, the complainants, now under the counsel of Selendy Gay