The $100 million collected in an ICO by the co-founders of the Status Network, has vanished. Furious investors are calling on a court to help.
- Investors can’t locate the co-founders of the Status Network, which creates Web3 apps.
- That’s a dilemma because they’re seeking to sue them for purportedly trading unregistered securities in a $100 million ICO.
- The investors are petitioning other large crypto companies, too.
The co-founders of Status network, whom very upset investors claim misled them into a $100 million ICO, are not anywhere to be found.
Counsel from firms Selendy & Gay PLLC and Roche Cyrulnik Freedman LLP filed a letter to a New York court on Monday stating that they had “undertaken exhaustive efforts” to find Jarrad Hope and Carl Bennetts, co-founders of Status, a software development company that develops Web3 apps, as well as a decentralized chat app and web browser. The letter says that investors are worried that the Status co-founders may attempt to escape “into the fog of internet obscurity.”
The investors registered the original complaint versus Hope and Bennetts in April. They claim that the network’s $100 million ICO in 2017 was an unregistered security sale and thus unlawful. The lawsuit claims that Status deceived investors by declaring its SNT token was a “utility network token” and not subjected to US securities laws. The investors need their money back, plus damages.
Hope is the co-founder and CEO of Status—he was accountable for placing the sale together. Bennetts is its co-founder and chief communications officer—he was liable for advertising the sale. Now, they’re nowhere to be found, and the investors’ lawyers have demanded that the judge require Hope and Bennetts to pay consideration to the case.
Both Hope and Bennetts are on Twitter. Hope is very active while Bennetts’s tweets are protected; Bennetts lists his location as Zug, Switzerland. Retweeted by Hope:
Their exact location, however, is unknown. The investors’ attorney has spent “significant resources” unproductively clicking throughout social media sites, blog posts, corporate records, and government record to locate them, they wrote in letters to the court. They even booked a private detective to track them down.
“Notwithstanding these diligent efforts, the Plaintiff has been unable to discern an address for either Individual Defendant.”
The investors can’t even achieve out where Status… is. The company is registered in Zug, Switzerland. Still, they’re unsure “whether Status’s address for service of process in Zug, Switzerland hosts any physical office space or employees, or whether it is simply a corporate mailing address.”
As also re-twitted by Hope:
A representative for Status refused to comment on the subject to Decrypt. The spokesperson declined to say whether he had himself talked to the co-founders.
The lawsuit versus Status was filed in April as part of the so-called “Red Wedding” batch of class-action complaints. The 42 investors from over a dozen countries, all denoted by the same New York law firm—Roche Cyrulnik Freedman—in April began 11 suits against Binance, Block.one, Bitmex and others, all are claiming that investors were misled into buying unregistered securities.
Jointly, the lawsuits solicit damages over billions of dollars worth of blockchain-based tokens sold in ICOs.