Legal Battle Unfolds: HelbizCoin Investors Win Court Ruling in Class-Action Lawsuit
A United States federal court has taken a significant step in allowing a nearly three-year-long class-action lawsuit to proceed against the creators of HelbizCoin.
The case was initially filed in 2020 against Helbiz, its CEO Salvatore Palella, and its partners, with an amended complaint filed in March 2022.
The case centers around an Italian electric scooter-sharing company called HelBiz, which conducted an ICO in 2018, raising $38.6 million and issuing an ERC-20 token in partnership with Anthony Di Iorio, one of Ethereum's founders, as alleged in the complaint.
The class-action lawsuit involves a group of investors, potentially numbering as many as 20,000, who claim that HelbizCoin was engaged in a deceptive "rug pull" and fraudulent "pump-and-dump" scheme.
Investors argue that Helbiz made false statements and promises to lure individuals into purchasing the tokens, with the majority of the ICO funds allegedly retained by the company.
"Among other matters, the case found that the ERC-20 token is a security under federal law," the investor's lawyer, Michael Kanovitz, said.
The assertion that HelbizCoin should be classified as a security under federal law adds a significant layer of complexity to this lawsuit.
Initially, the case faced challenges when it was dismissed by a lower court judge in January 2021, citing a 2010 Supreme Court precedent that limited the scope of federal securities laws beyond U.S. borders.
However, the case gained new life in October 2021 when the 2nd U.S. Circuit Court of Appeals deemed the lower court judge's decision incorrect. An amended complaint was filed in March 2022.
The appeals court challenged the lower court's assertion that it lacked jurisdiction to review Helbiz Inc.'s $38.6 million initial
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