A class action has been filed against the 2018 Helbiz ICO.
20,000 ICO investors are filing a lawsuit after having filed a complaint with the US District Court for the Southern District of New York.
The plaintiffs accuse Helbiz, founder Salvatore Palella, Neteller, Skrill, and other co-founders of violating the startup’s fundraising model contract.
As promised, HelbizCoin (HBZ) and the associated blockchain platform were supposed to be a peer-to-peer solution to reinvent the economics of sharing transportation, leading to the company raising nearly $40 million.
According to the whitepaper, there should have been a private Alpha version of the platform by the end of 2018, while the Beta should have arrived in early 2019, and the final public version should have been launched by the middle of the same year.
According to Loevy & Loevy’s civil rights lawyer, Michael Kanovitz, the company’s misconduct would be a violation of the contract and could even constitute fraud.
The platform that was supposed to be launched last year was supposed to allow the rental of vehicles with smartphones, with the aim of expanding to scooters, cars and hydroplanes, and was to be entirely based on HBZ.
To date, the Helbiz App has been downloaded 100,000 times, and is available in several Italian, Spanish, Portuguese and US cities.
In 2019 the company raised another $10 million from private investors.
The company’s response was that the lawsuit would be groundless, and that the claims, including the violation of the contract, would be devoid of merit.
However, according to Morrison Cohen’s partner, Jason Gottlieb, the case is very unusual because it differs from the vast majority of other cases involving ICOs.
In this case, in fact, the plaintiffs decided not to include any allegation of fraud, but only the allegation of violating the contract. This, according to the general counsel of the DeFi startup Compound, Jake Chervinsky, could make it easier to take the case to court.
Helbiz, for its part, admits that in two years less than 2,100 rides have been rented with the HBZ token, but claims that the company has fulfilled its obligations.
According to Palella’s promise, the value of HBZ, initially purchased at $0.15 during the ICO, was supposed to rise to $10, with a return of more than 6.5%, but this did not happen. As of today, there still does not seem to be any exchange on which HBZ is publicly tradable, and on CoinMarketCap its value would have dropped to $0.000112, a loss of more than 99.9% since the ICO.