Another year, another lawsuit in the world of ICOs. This time the target is Giga Watt, a startup that aimed to launch a cryptocurrency mining facility. The company brands itself as a leading provider of turnkey mining solutions. A group of investors, however, is unhappy with its services and has filed a lawsuit over project delays that they say are costing them money.
An ICO that raised $20 million
Plaintiffs claim they contributed to Giga Watt’s ICO last summer, helping raise roughly $20 million in cryptocurrencies. Although those cryptocurrencies are now worth about five times as much, the investors say they received nothing in return: no encryption keys, no Giga Watt tokens, and no mining equipment.
The plaintiffs allege they will likely never receive their tokens or see their mining rigs delivered, and that the delays have cost them both time and money.
Following Tezos, now Giga Watt
The situation bears similarities to the Tezos lawsuit. In that case, the project’s founders faced multiple legal actions and questions about the nature of the tokens issued. Like Tezos, Giga Watt’s offerings and operations are under scrutiny to determine whether the tokens should be treated as securities. David Silver, one of the attorneys who filed the complaint against Giga Watt, stated that the possibility tokens might be useful someday does not absolve the company of responsibility.
As with Tezos, Giga Watt investors are frustrated by long delays. Even if the project’s cryptocurrencies are eventually launched, it remains unlikely that investors will be able to realize the returns they had expected.