A federal court in California has accepted a plaintiff’s petition in a case against Paragon cryptocurrency startup to consider it at the federal level. Investors accuse the project of selling unregistered securities for $70 million. This is reported by Cointelegraph.
The creators of the project raised the indicated amount in 2017 through an ICO. They planned to issue a PRG token as a digital currency for the cannabis industry. A class-action lawsuit against the company was first filed in January 2018.
In February of that year, Paragon, under pressure from the SEC, agreed to register its tokens as securities. Despite this, US investors continue to insist on a violation of their rights in court.
According to Judge Jeffrey White’s ruling, the lawsuit will be considered at the federal level. The organizers of the project petitioned for its consideration in the jurisdiction of California, since the distribution of tokens came from the office of Paragon Coin Inc. in this state.
The plaintiffs believe that the victims of Paragon could be residents of all 50 states, which is why the consideration of the case in each jurisdiction is not in the interests of investors. The judge agreed with their arguments. He pointed out that residents of various regions could participate in the ICO since the sale of tokens was carried out on the Internet.