A group of investors filed a lawsuit in the Supreme court of new York on cryptocurrency exchange Huobi, to its us unit HBUS and ICO-startup Elastos, reports Cryptobriefing.

The reason for the lawsuit was the alleged violations of securities legislation. In particular, lead plaintiff mark Owen I am sure that last year’s primary offer coin project Elastos violates section 5 of the securities Act, the U.S. 1933. Under that standard, all offers of securities must be governed by the SEC.

The lawsuit stated that the ICO project Elastos was an unregistered sale of securities. Also, according to the plaintiffs, tokens ELA is essentially an investment that grow with the development of ecosystem Elastos and growth of user demand for coins.

Among exchanges, where the token ELA (99th place CoinMarketCap), there are large trading platform Huobi:

The plaintiffs argue that neither Elastos or Huobi did not register ICO in the Commission on securities and stock exchanges of the USA. However, in the white paper of the project indicated that ELA are utilitarian tokens used for trading and payment of commissions in the network Elastos.

“The defendants blatantly ignored the universally recognized American securities laws. In particular, they did not register the tokens in ELA SEC. None of the defendants are not registered in the Commission as a broker or dealer to sell assets in the U.S., as required by law”, — stated in court documents.

Chinese project Elastos is working on creating “the Internet on a blockchain”. During January 2018, the ICO project has sold 2 million tokens ELA. Initially, investors were asked to block for three years the coins project in order to receive a bonus of 6% of their value. Subsequently, however, the program was phased out.

Founder Elastos Ron Chen said that he intends to contest the charges.

“Elastos believes that the statements of the plaintiffs are unfounded and will vigorously defend their interests in court” — he said.

We will remind, recently the exchange Huobi has launched a US shopping Vietnam pair with the US dollar.

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