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Lawsuits, hearings batter bitcoin sector as owners HODL (hold on for dear life!)

Kevin G. Hall and Tim Johnson, McClatchy Washington Bureau on

Published in Business News

Bitter investors, meantime, moved on their own against crypto-related businesses, filing lawsuits in California, Florida, and elsewhere.

Among those hit with a class-action suit was Paragon, a company catering to the marijuana industry that uses the blockchain technology that is the scaffolding for most digital currencies.

A former Miss Iowa, Jessica VerSteeg, is a founder of the company, which was served with a suit Jan. 30 saying its initial coin offering that raised $70 million violated federal securities laws. Paragon did not immediately respond to a query.

Another company in the crosshairs of regulators, Dubai-based USI Tech Limited, promised investors that they would obtain a daily return of one percent.

The Texas Securities Commissioner issued a cease and desist order against the company Dec. 20, and noted that it had targeted investors using Craigslist ads, YouTube videos and standalone websites. A co-founder of the company, Horst Jicha, acknowledged in a talk Jan. 23 that he had made the decision to "switch off" operations in Canada and the United States but that he hoped to reopen in North America at some point.

 

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