According to Cointelegraph, a United States District Court has permitted a class action lawsuit against the creators of HelbizCoin to proceed. The lawsuit, which has been ongoing for nearly three years, was first filed against Helbiz, its CEO Salvatore Palella, and its partners in 2020, with an amended complaint submitted in March 2022.
The case involves Italian electric scooter-sharing company HelBiz, which raised $38.6 million in an ICO and issued an ERC-20 token with Ethereum co-founder Anthony Di Iorio in 2018. A group of investors, numbering up to 20,000, alleged that HelbizCoin was a fraudulent pump-and-dump scheme and that the company made false statements and promises to induce people to purchase the coins.
On September 1, the US District Court for the Southern District of New York partially ruled in favor of the investors who filed the class action suit. The court granted the motions to dismiss in part and denied them in part, dismissing all claims against certain defendants entirely, including Paysafe, Skrill, Decentral, and Alphabit.
However, Judge Louis Stanton ruled that plaintiffs adequately stated claims for fraud, price manipulation, violations of securities laws, commodities laws, the RICO Act, and unjust enrichment against some defendants. The case found that the ERC-20 token is a security under federal law, according to the investor's lawyer Michael Kanovitz.
The lawsuit was initially dismissed by a lower court judge in January 2021 but was revived in October 2021 when a 2nd U.S. Circuit Court of Appeals found the lower court judge erred in its decision. An amended complaint was filed in March 2022.