ICO mining outfit Giga Watt are being taken to court in a group action lawsuit by disgruntled investors who are alleging securities fraud.
The case, lodged at U.S. District Court in Eastern Washington, states that the group contributed the equivalent of more than $20 million during an ICO sale which occurred over the months of July and August of 2017.
Product “May Never Be Fully Launched”
The investors were to be issued with Giga Watt tokens (WTT) that would have allow them to either use Giga Watt’s mining facilities rent-free for 50 years or have the in-house teams mine for them.
However, the delay in achieving a functional product raised concerns which allegedly lead to attempts at pacify the investors by the representatives of the company.
In doing so, the plaintiffs allege that the project team “unmistakably stated to investors that between the time of the ICO and the date on which each investor would be issued his/her Giga Watt tokens, the value/price of each Giga Watt token was anticipated to increase significantly.”
The plaintiffs claim this constitutes fraud by making an unregistered securities offering.
More worryingly perhaps for other contributors is that the court paperwork alleges that: “As of the date of this filing, the Giga Watt Project is purportedly still being developed and, upon information and belief, might never be fully launched.”
Prior to the ICO, Giga Watt employed legal advisors Perkins Coie to ensure their tokens would not be considered as securities.