Cryptocurrency Hedge Fund Sued for Abandoned ICObr>
Cryptocurrency investor law firm Silver Miller has filed a class action lawsuit against Monkey Capital, a Delaware-based company seeking to create a decentralized hedge fund.
The lawsuit, filed in the US District Court in Florida, alleges that Monkey Capital fraudulently promoted an initial coin offering (ICO) that violated numerous state and federal securities laws. The lawsuit represents five plaintiffs who invested cryptocurrency now valued at $3.8 million into the project.
Back in July, Monkey Capital launched a pre-ICO with Coevals (COE), a hybrid derivative token, that were to be later used to purchase Monkey Coins, the core asset of the project, at a valuation premium in a forthcoming ICO.
The lawsuit alleges that as quickly as it had gathered millions of dollars in Coeval from solicited pre-ICO investors, Monkey Capital aborted its ICO just days before it was scheduled to commence, deactivated its website, liquidated the investors’ funds, and devalued the market of the Coeval cryptocurrency options that Monkey Capital had created and issued to its investors in exchange for their investment funds.
“Monkey Capital promoted that, through its ‘all-star management team,’ it would be operating a decentralized hedge fund to invest in items such as SpaceX supply contracts and hostile public company takeovers and blockchain systems while simultaneously speculating on large blocks of cryptocurrency,” the filing states.
The lawsuit pleads that the court adjudicate that Monkey Capital and its founder, Daniel Harrison, violated multiple securities laws when they promoted and abruptly abandoned the unregistered, pre-functional ICO. It also pleads that the court rescind all investments in Monkey Capital, return to all investors their cryptocurrency, and require Monkey Capital to account for all funds raised from investors.
“Daniel Harrison and Monkey Capital are a damning indictment of what is wrong with the ICO market and the unregulated sales of securities,” said David Silver, partner at Silver Miller.
Harrison said the content of the lawsuit are baseless hearsay. He added that “what the individuals who submitted this ridiculous filing have done today will in time turn out to be a course of action that they really regret taking.”