An investor sued Nasdaq-listed cryptocurrency mining company Riot Blockchain for $ 728,200, which the investor owes in another breach of contract lawsuit.
According to court documents filed on April 3, the above amount is the money that Riot Blockchain investor Barry Honig and consultancy GRQ Consultants spend on legal proceedings over contracts between the parties. The application reads:
“All agreements contain thorough safeguard provisions that oblige the defendant to defend and indemnify the gentleman. Honig and GRQ against all subsequent lawsuits or claims “related to the” purchases of securities they have made, and / or “any violation or alleged violation by [Defendant] of the Securities Act, [or] the Exchange Act. ”
According to documents, Honig and GRQ – of which he served as a trustee – entered into securities purchase and registration rights agreements with Riot Blockchain in March 2017 for $ 1.725 million. The following year, several legal actions were brought against Honig and GRQ, arguing that the securities transactions included in the contract violate the regulations. The application reads:
“Honig vehemently denies any claims made against him in those proceedings and has spent significant amounts of money to defend his defense.”
Although Honig believes that the legal action against him is unfounded, he claims that these lawsuits are triggering the safeguard obligations for him and GRQ. Riot Blockchain, on the other hand, declined to cover the legal fees in question, and claimants point out that the company’s latest quarterly report shows it had over $ 20,324,000 in assets.
The cryptocurrency industry, like any other space with a large amount of money, sees a myriad of lawsuits. Seven cryptocurrency companies have been the target of lawsuits filed with New York Federal Court on April 3.
As announced yesterday, a company representing more than 100 victims of an alleged $ 35 million Ponzi scheme in the third quarter filed a class action lawsuit against Wells Fargo advisers.