Roche Freedman LLP filed a class action lawsuit yesterday on behalf of investors in the crypto-asset “ICP” against DFINITY USA Research LLC and its affiliate the DFINITY Foundation (collectively, “DFINITY”), as well as DFINITY CEO Dominic Williams, alleging that DFINITY engaged in insider trading, securities fraud, and the promotion and sale of unregistered securities when it created and launched its “Internet Computer Protocol” and issued ICP tokens to itself and other insiders on May 10, 2021.
The lawsuit, brought in the U.S. District Court for the Northern District of California, alleges that shortly after issuing ICP tokens to itself and its insiders, DFINITY and its insiders began to sell massive quantities of these ICP tokens to the public, causing the price of ICP tokens to fall from a high of over $730 on May 10 to approximately $60 on August 9. According to the lawsuit, DFINITY and its insiders thus dumped massive amounts of ICP tokens on the open market, securing billions of dollars of profits for themselves and driving the price of ICP down.
The lawsuit is thus brought on behalf of all persons or entities who purchased ICP tokens from May 10, 2021, to the present. The action is captioned Daniel Valenti v. DFINITY USA Research LLC, DFINITY Foundation, and Dominic Williams, Case No. 5:21-cv-06118 (N.D. Cal.).
In asserting violations of Sections 5, 12(a)(1), and 15 of the 1933 Securities Act and Sections 10(b), 20A, and 20(a) of the 1934 Securities Exchange Act, the lawsuit alleges that company executives, including CEO Dominic Williams, failed to disclose that DFINITY and its insiders held ICP tokens that were not locked up pursuant to vesting schedules like the tokens held by DFINITY’s other early investors. This failure to implement and disclose any transparent vesting plan was not only contrary to industry norms for crypto-asset issuances, but also resulted in the fraudulent concealment of material information from the investors who purchased ICP tokens from DFINITY insiders beginning on May 10.
DFINITY USA Research LLC is a Delaware company headquartered in Palo Alto, California. The DFINITY Foundation is a Switzerland-based not-for-profit organization with operations and employees in Palo Alto and San Francisco, in Zurich, Switzerland, and in Tokyo, Japan.
For investors who purchased or sold ICP securities during the Class Period, you are a member of this proposed Class and may be able to seek appointment as lead plaintiff, which is a court-appointed representative for the Class, by complying with the relevant provisions for the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). See 15 U.S.C. § 78u-4(a)(2)(A)(i)-(iv). If you wish to serve as lead plaintiff, you must move the Court no later than October 12, 2021. You need not seek to become a lead plaintiff in order to share in any possible recovery. You may retain counsel of your choice to represent you in this action.
For further inquiries regarding this matter, please contact Kyle Roche (email@example.com) at 646-970-7509.