Crypto Investors File Securities Class Action in Wake of Still-Postponed Monkey Capital ICO

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A proposed class action lawsuit has been filed in Florida against Monkey Capital, LLC; Monkey Capital, Inc.; and the companies’ founder in which six plaintiffs claim the Delaware-based cryptocurrency hedge fund fraudulently induced investors into contributing millions to a postponed Initial Coin Offering that, to this day, has not happened. The plaintiffs—who alone contributed more than $3.8 million to the Monkey Capital Market ICO for which the lawsuit says the total initial investments are now valued at more than $15 million—claim the defendants “have already pocketed for themselves large sums of money” for which investors will potentially never see returns. 

The lawsuit says Monkey Capital spent months promoting the development of a supposed “unified network of news and data distribution” regarding virtual capital assets coupled with a private cryptocurrency exchange and decentralized hedge fund collectively called the Monkey Capital Market. Initial investors, the lawsuit says, would be given cryptocurrency options called “Coeval,” which were of the defendants’ own creation and, once the ICO took place and Monkey Capital Market was launched, could be exchanged for a to-be-created cryptocurrency called Monkey Coin. According to the complaint, the defendants told investors that Monkey Coin would skyrocket in demand and value once Monkey Capital Market got off the ground. 

Despite a July 15, 2017 launch date, Monkey Capital’s ICO was postponed by the defendants until August 8, the case says, with the company stating the ICO period would remain open through early September to allow for “major institutional partners” more time to “align their investment interests.” The plaintiffs allege this delay was nothing more than a ruse to stimulate artificial interest and the “fear of missing out” among investors. The case says August 8 came and went without the ICO happening, and with Monkey Capital’s fundraising website no longer accessible.

Lacking any other recourse considering the unregulated nature of cryptocurrency exchanges and ICOs, the plaintiffs allege what proposed class members actually invested their money in “looks like a security, functions like a security, and fits the definition of a security.” 

“Notwithstanding [the defendants’] attempts to avoid governmental and private scrutiny, it is clear that the financiers were indeed profit-seeking investors in a security and that [the defendants] promoted and conducted an unregistered offering of securities,” the plaintiffs argue.

The full complaint can be read below.