EOS Network’s Legal Threat to Block.one Over $1B Investment
The EOS Network Foundation has demanded that Block.one uphold an agreement to invest a billion dollars in the EOS network.
In an open letter to Block.one, Yves La Rose, the founder, and CEO of the EOS Network Foundation, threatened to bring a class action lawsuit against the blockchain investment firm.
The Billion Dollars That Never Materialized
EOS is a blockchain infrastructure platform. It was designed as a Layer One solution for building decentralized apps.
Block.one developed the software for the EOS blockchain which it released in 2018. It then raised over 4 billion USD from an initial coin offering (ICO), making it the largest ICO of that year.
However, since then, the EOS community has become disgruntled with Block.one.
Block.one initially promised to invest a billion dollars to support the network’s growth and development. But in Saturday’s letter, La Rose accused the firm of failing to fulfill its obligations.
The letter stated the company “has provided minimal real support to EOS Network efforts to develop the network.”
It added that:
“as time has passed, it has become apparent that [Block.one] does not have and has never had any intention of investing the $1 billion promised in EOS Network.”
EOS vs Block.one: A Messy Separation
It was Block.one that initially led the development of the EOS.io protocol. Yet by 2021, the relationship between Block.one and the EOS Network Foundation had become fraught.
After failing to obtain the intellectual property rights to the EOS software from Block.one, the network’s block producers came together to halt payments of EOS tokens to the firm. Block.one was originally set to receive 100 million EOS over ten years. But after it was fired by the EOS community, the company only ever got 33 million.
Now, Block.one’s problem child is threatening even more drastic action.
EOS Network Foundation Threatens Legal Action
In the open letter, the EOS Network Foundation calls on EOS token holders to consider legal proceedings against Block.one for breaking its promise to invest in the EOS ecosystem.
The letter claims that both the functionality of the EOS network and the price of the EOS token have suffered from Block.one’s underinvestment.
Certainly, following the biggest ICO of 2018, the project has failed to live up to expectations. And at present, the EOS token is trading at just a fraction of its 2018 value.
“If enough token holders are interested in making a legal claim, a class action lawsuit is a possibility,” the letter states. It adds that the EOS Network Foundation is prepared to bring token holders together to advance a claim against Block.one.
Additionally, the letter suggests that block producers consider a hard fork that would exclude Block.one-owned tokens. This would have the effect of cutting Block.one out of the network’s ownership and governance entirely. The subsequent decrease in token supply could also buoy the price of EOS.
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