Dfinity (ICP Token) Misleading Token Distribution and Market Manipulation Case

The defendant has requested the court to dismiss the case.

N.D. California

Court

3:21-cv-06118

Case number

05/10/2021

Class period Start

08/09/2021

Class period End

ICP token investors filed a lawsuit against Dfinity for misrepresenting its token supply and secretly manipulating the launch of Internet Computer (ICP) to benefit insiders.
After the token’s value collapsed by over 90% in the months following launch, investors suffered massive losses.
ICP token investors can join this case to stay updated on potential recovery.
Case Details:

In May 2021, Dfinity launched its Internet Computer (ICP) token, claiming it would power a decentralized global computing platform. The company told investors ICP had a carefully limited supply and a fair distribution model. At launch, ICP was valued at over $400 and briefly had a market cap over $35 billion.

Allegedly, Dfinity secretly allocated large amounts of ICP to insiders and early backers while limiting access for retail investors. At the same time, Dfinity used a complex system of transfer restrictions and centralized controls to offload tokens while preventing regular buyers from selling.

In the weeks following launch, the price of ICP collapsed by more than 90%. Investors later discovered that Dfinity had released far more tokens into circulation than publicly disclosed and that its Foundation controlled many of the wallets selling ICP at inflated prices.

Based on these events, ICP token investors filed a lawsuit against Dfinity, claiming the company:
It secretly inflated the circulating supply of ICP while assuring investors of a limited release.
It misled the public about its tokenomics and failed to register the ICP token as a security.
It used centralized control over token distribution to benefit insiders and early backers.
Investors believe Dfinity orchestrated a deceptive token launch.

Case Status

Motion to dismiss

Alleged Offence

Misleading Statements,

Financial Misrepresentation,

Failure to Disclose

Suspected Party

Directors,

Management

Security Type

Crypto Asset

Trade Direction

Long

Shock Event Date

05/10/2021

Filing date

08/09/2021

Judge

James Donato

Dfinity USA Research, LLC

Dfinity USA Research, LLC is a U.S.-based blockchain technology company affiliated with the Dfinity Foundation. The company is involved in the development of the Internet Computer Protocol (ICP), a...

Ticker

N/A.PRVT

Sector

Technology

Industry

Web3 & Blockchain

Country

United States

Address

205 2nd Street, San Francisco, CA 94105, USA