Lawsuit Against Nano Devs Commences, ‘Rescue Fork’ Requested for BitGrail Funds

A class action lawsuit that was filed in April of 2018 has commenced against the creators of the Nano (NANO) cryptocurrency, in which the plaintiffs allege that developers “violated federal securities laws.” The lawsuit is being handled by Silver Miller Law and Levi Korsinsky, LLP, both US-based firms specializing in securities fraud and/or investment loss. The full text can be found here.

Specifically, the suit claims that developers of Nano - which was previously called “RaiBlocks” before a rebrand earlier this year - “recklessly” encouraged plaintiffs to buy the cryptocurrency on a little known Italy-based exchange called BitGrail, which at the time hosted most of RaiBlocks’ trading volume.

BitGrail (now apparently non-functional) claimed to be hacked last February, but was generally accused of conducting an exit scam. The event caused the value of then-RaiBlocks to plunge 20% in price. Almost $200 million worth of RaiBlocks tokens were either stolen or removed from the exchange.

Notably, the founder of BitGrail Francesco Firano asked the RaiBlocks(/Nano) developers at the time to hardfork the currency in order to return users’ funds to them, à la the Ethereum hardfork which birthed Ethereum Classic. The developers refused.

However, the current lawsuit formally requests that Nano developers conduct such a “‘rescue fork’ or some other procedure” in order to reimburse burned investors.

Securities Violation

There are altogether eleven charges brought against the team, two of them being often-cited violations of Sections 12(a)(1) and 15(a) of the US Securities Act of 1933.

The filing claims that “the success of the investment opportunities and any potential returns thereon were entirely reliant on Defendants’ ability to maintain and expand the functionality and popularity of [RaiBlocks/Nano], thus providing financial returns to investors.”

Whether or not - and which - cryptoassets are considered securities under US law is still a murky and inchoate issue. Although at least two of the best known digital assets, Bitcoin and Ethereum, have been grandfathered in as non-securities, perhaps the next-best known one - XRP - is still languishing in legal limbo.

CryptoGlobe recently reported on the US Securities and Exchange Commission’s efforts to prosecute what it sees as securities violators. There has been recent talk about changing the aged 1933 law to accommodate the emerging asset class that is cryptoassets.

Japanese Lawmakers Propose Digital Yen over Concerns Surrounding Libra, China

A group of Japanese lawmakers has started working on a proposal for Japan to issue its own digital currency over concerns surrounding Facebook’s Libra and China’s upcoming digital yuan.

According to Reuters the cryptocurrency, a digital equivalent of the yen, would be a joint initiative between the country’s government and private companies to put Japan “in tune with global changes in financial technology.” Speaking to the news agency Norihiro Nakayama, parliamentary vice minister for foreign affairs, stated:

The first step would be to look into the idea of issuing a digital yen… China is moving toward issuing digital yuan, so we’d like to propose measures to counter such attempts.

The group of lawmakers, comprised of about 70 Liberal Democratic Party members, is led by former economy minister Akira Amari, and plans to submit a proposal to the government as early as next month.

Reuters notes that Japan is unlikely to issue its own digital currency any time soon as there are technical and legal barriers to overcome, although the move comes as the Bank of Japan, the country’s central bank, joined six other central banks to share expertise on creating digital currencies.

The report adds that Shinzo Abe, the country’s Prime Minister, recently told parliament the government will work with the Bank of Japan in studying digital currencies and “ways to enhance the yen’s convenience as a settlement means.” Some Japanese lawmakers, it says, voiced concerns over China’s move to expand the yuan’s influence as a settlement currency.

A former board member of Japan’s central bank, Takahide Kiuchi, was quoted as saying:

The BOJ probably won’t want to do anything that would stifle private-sector innovation. The best way could be to issue a hybrid-type digital currency that is operated and issued by private firms, with the central bank’s involvement.

Kiuchi noted he believes China and Japan have different motives to issue their own cryptocurrencies. While china ants to enhance the yuan’s influence, Japan would be trying to change its cash-loving culture.

Japan, it’s worth noting, has been accepting bitcoin as legal tender since April 2017, and is home to various prominent cryptocurrency businesses.

Featured image via Unsplash.