Presidential Candidate Brock Pierce Served Fraud Lawsuit Doc During Campaign Rally

US presidential candidate Brock Pierce was served court papers during a campaign rally, regarding a lawsuit alleging securities fraud in connection with the EOS token sale by Block.one, where Pierce was a former executive. The lawsuit, brought by Lead plaintiff Crypto Assets Opportunity Fund, accuses Block.one and its former executives, including Pierce, of deceiving investors and seeks damages.

Presidential Candidate Brock Pierce Faces Fraud Lawsuit During Campaign Rally

New York, September 16, 2020 - United States presidential candidate Brock Pierce, a prominent figure in the cryptocurrency industry, was served with legal documents during a campaign rally in New York City on Monday. The documents pertain to a class-action lawsuit alleging securities fraud in connection with the EOS token sale, which raised over $4 billion in 2017 and 2018.

Video footage captured by a bystander and posted on Twitter shows Pierce receiving what appear to be official court papers. The documents are believed to originate from a lawsuit brought by the Crypto Assets Opportunity Fund, which alleges that Block.one, the blockchain developer behind the EOS token, misled investors during the token sale.

The lawsuit names Block.one's CEO, Brendan Blumer, CTO, Dan Larimer, former CSO, Brock Pierce, and former partner, Ian Grigg, as defendants. The plaintiffs accuse the executives of deceptive marketing practices and seek damages on behalf of investors who purchased EOS tokens.

In September 2019, Block.one settled with the Securities and Exchange Commission (SEC) for $24 million over allegations that the token sale constituted an unregistered securities offering. However, the private class-action lawsuit filed by the Crypto Assets Opportunity Fund is separate from the SEC enforcement action.

"Fortunately for investors who suffered losses, they have a private right of action against Block.one that is not barred by the SEC's settlement," said Jenny Vatrenko, legal director at Haven Network, in comments posted on Twitter.

Pierce, who has co-founded several cryptocurrency projects, including stablecoin Tether and Blockchain Capital, announced his bid for the presidency in July. However, he missed filing deadlines in multiple states, rendering his candidacy largely symbolic.

Prior to his involvement in the cryptocurrency industry, Pierce was a child actor, appearing in Disney films such as "The Mighty Ducks" and "First Kid."

The lawsuit against Pierce and the other Block.one executives is likely to cast a shadow over his presidential campaign. It raises questions about his credibility and judgment, as well as the potential financial implications for his campaign.

The outcome of the lawsuit is uncertain, and the parties may eventually reach a settlement. Nonetheless, the allegations of securities fraud are serious and could have a significant impact on the reputation of Pierce and the cryptocurrency industry as a whole.

Background on Block.one and the EOS Token Sale

Block.one is a Cayman Islands-based blockchain company founded in 2017. It is best known for developing the EOS.IO protocol, a blockchain platform designed for high-performance decentralized applications. The EOS token is the native cryptocurrency of the EOS.IO protocol.

The EOS token sale took place between June 2017 and June 2018 and raised over $4 billion, making it one of the largest initial coin offerings (ICOs) in history. The plaintiffs in the lawsuit allege that Block.one and its executives misled investors during the token sale by falsely claiming that the tokens were not securities.

The SEC reached a settlement with Block.one in September 2019, in which the company agreed to pay $24 million in damages and register the EOS token as a security. However, the private class-action lawsuit is still ongoing, and the plaintiffs are seeking additional damages on behalf of investors.