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A group of class action plaintiffs are trying to get ahead of The Game by having the West Coast rapper made liable in a $12 million cannabis cryptocurrency judgment.
Investors have filed a class action lawsuit against the executives of cannabis cryptocurrency startup ParagonCoin Inc. in a California federal court, alleging they violated securities laws when launching its $70 million initial coin offering (ICO), Law360 reported.
Plaintiff Astley Davy first filed the class action in January 2018, alleging ParagonCoin violated securities laws because its ICO wasn’t registered with the U.S. Securities and Exchange Commission when he bought $1,600 worth of the tokens.
The Class represents anyone who bought the company’s “PRG Tokens” during Paragon’s ICO from Aug. 15, 2017 to Oct. 15, 2017, with an estimated 8,000 Class members.
In March of this year, U.S. District Judge Jeffrey S. White entered default judgments against the company’s founders Jessica VerSteeg and Egor Lavrov, and executives Eugene Bogorad, Alex Emelichev, and Gareth Rhodes, saying they were liable for more than $12 million in damages.
The plaintiffs had also fought for rapper The Game — whose real name is Jayceon Terrell Taylor — to be made liable for damages, arguing that he was soliciting sales of the cryptocurrency. They allege Paragon employed him as a celebrity endorser to get investments.
Last Wednesday, White ruled that he agreed with the investors and that Taylor could be liable.
“Upon consideration of plaintiffs’ renewed motion, the court is persuaded the allegations are sufficient to show that Taylor acted for his own gain or for Paragon’s gain and, thus, could be considered a statutory seller,” White reportedly said.
The plaintiffs said the company had sold the tokens as a currency for the marijuana industry, when really they were an investment for buying real estate for coworking spaces. They were seeking disgorgement of profits.
In another recent cryptocurrency class action lawsuit involving a rapper, the 11th Circuit Court of Appeals last week published an opinion ruling in favor of T.I. and entertainment executive Ryan Felton in a class action case accusing the pair of securities law violations in their offering of FLiK Tokens.
Do you think The Game should be liable in this class action lawsuit? Let us know in the comments!
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