A class action lawsuit has been filed against Centra Tech over an ICO that raised $32 million last month, BlockTribune reported.
Centra Tech claimed to have developed platforms that connect world commerce and cryptocurrenicies. According to the company, the ICO funds were to be used for the creation of “the world’s first multi-blockchain debit card with a smart and insured wallet.”
The complaint describes the defendants as having “made a feeble attempt to portray the Centra ICO as a sale of ‘utility-based tokens’ that were ‘not securities, shares or investments’.”
The suit alleges that the Centra ICO comprised “a clear offer and sale of securities” due to the defendants “having explicitly referring to the ICO participants as ‘investors’,” in addition to “touting… that the CTR Tokens received in exchange for their investments would be worth more than the… cryptocurrencies invested.”
Before conducting the ICO, the Miami Beach-based blockchain firm brought on board such celebrity endorsers as boxing champion Floyd Mayweather Jr. and musician DJ Khaled to promote its token sale.
Filed in Miami by Komlossy Law in Florida, the complaint also accused the defendants of misleading investors about the nature of its relationship with card networks Visa and Mastercard, as well as listing fake team members on its website.
Centra Tech disputed the allegations in the complaint. The company said the lawsuit “repeats unfounded claims” regarding Centra Tech. The company added that the plaintiff’s complaint attempts to mimic claims and allegations the Securities and Exchange Commission has lodged against other ICOs.