Updated 6/2/20 Atonomi ATMI SAFT Class Action
The Restis Law Firm is on the Lead Counsel team in Hunichen v. Atonomi LLC et al, currently pending in the United States District Court for the Western District of Washington. Case No. 2:19-cv-00615-RAJ-MAT.
Atonomi is a securities class action on behalf of investors in the Atonomi Initial Coin Offering pre-sale. Proposed class members invested approximately $25,000,000 through Simple Agreements for Future Tokens, or “SAFTS” between January and June 2018. The case does not include investors who affirmatively assented to the “Final Terms of Sale” by executing or affirmatively demonstrating agreement to those Final Terms.
Federal and state securities laws generally require any security offered or sold in the U.S. to be registered with the Securities and Exchange Commission or state securities regulators. These laws protect investors by requiring various disclosures that help investors understand investment risks.
Putative class members’ SAFTS are admitted securities. According to the Complaint however, Atonomi’s founders did not comply with federal and state rules required to be exempt from registration requirements.
Since the ICO, the Atonomi project has failed, and ATMI have become essentially worthless. If the lawsuit is successful, investors will be entitled to unwind their investment in the Atonomi SAFTS, and get back ETH or the equivalent in US dollars, plus interest. Investors would also be entitled to damages if they sold their Atonomi ATMI tokens at a loss.
On April 21, 2020, the Honorable Richard A. Jones denied defendants’ motions to compel individual arbitrations (i.e., no-class actions allowed) and to dismiss the case. Judge Jones concluded defendants failed to prove that SAFT investors agreed to an arbitration clause that did not exist until months after they signed their SAFTS.
Judge Jones also concluded the complaint sufficiently alleged Atonomi founders violated Washington securities laws by selling ATMI via the SAFTs. In doing so, the court rejected each and every one of the Atonomi founders’ arguments in favor of dismissal.
On June 2, 2020, the Honorable Magistrate Judge Mary Alice Theiler recommended that Judge Jones grant Plaintiffs’ motion for a preliminary injunction freezing the ICO proceeds in possession of Atonomi and its parent company, Centri Technology Inc. Judge Theiler also recommended that these defendants provide an accounting to the plaintiff and the Court of the ICO proceeds. If Judge Jones adopts the Report and Recommendation, it means the Court thinks that Plaintiff – and by extension the putative class – will be successful proving their case at trial.
The plaintiff anticipates the next litigation step will be class certification. That is where the Court determines whether the plaintiff can represent the entire class of ICO investors. If the class is certified, ICO investors will receive notice from the Court instructing them on their legal rights. Most likely, investors will be notified through the email address used to sign up for the ICO.