Nasdaq-Listed Company Xunlei Faces Class-Action for Disguising ICO


Nasdaq-listed know-how agency Xunlei has change into the topic of a number of class-action lawsuits from traders who bought the corporate’s digital token, Linktoken. Xunlei is accused of deceptive traders to disguise an preliminary coin providing (ICO) by means of which Linktoken was distributed.

Also Read: Survey: 89% of Visa, Mastercard, Unionpay Users Know Crypto – 53% Have Purchased

Xunlei CEO Rejects ICO Allegations

Nasdaq-Listed Company Xunlei Faces Class-Action for Disguising ICOThe chief government officer of Xunlei, Chen Lei, has rejected accusations that the corporate misled traders with the intention to illegally conduct an ICO in China.

Xunlei’s Linktoken was distributed to customers in change for a contribution of idle web bandwidth, in response to South China Morning Post. Chen Lei has claimed that the Linktoken distribution didn’t comprise an ICO because of the firm not elevating any funds by means of the issuance of the tokens, and resulting from Linktoken comprising a utility token that’s not allowed to be traded. “By making a public offering, really you need to use it to raise money. We have never used a coin to raise any money at all, that’s never our intention,” Mr. Lei acknowledged.

In October 2017, Linktoken was launched along side different efforts by Xunlei to enter the booming blockchain business. Whilst the distribution of the Linktoken seems to have been the catalyst for many weeks of sharp bullish motion, the worth of Xunlei’s inventory has greater than halved since posting 500% features and setting document highs of $25 USD in November 2017.

Xunlei’s Stock Plummets

Nasdaq-Listed Company Xunlei Faces Class-Action for Disguising ICOSince then, the value of Xunlei’s shares had plummeted to roughly $10 by early April, prompting some U.S.-based traders to hunt motion towards the corporate for allegations of giving false and/or deceptive statements concerning the legitimacy of the corporate’s cryptocurrency-related actions between October 2017 and January 2018. Among different allegations, traders have pointed to the requirement that they buy {hardware} from Xunlei with the intention to share bandwidth and declare the digital tokens in return.

Chen Lei has refuted the allegations, stating “We are a small capital company, so our stock price does fluctuate, but I don’t think there’s any basis for the lawsuit because we’re operating in China and it is the Chinese law and regulations that we need to observe,” including that “the definition of [an] ICO has to be interpreted in the Chinese market.” Mr. Lei additionally indicated that Xunlei is presently within the means of hiring authorized counsel to refute the allegations.

Chen Lei Claims to Support Regulatory Action Against ICOs

Nasdaq-Listed Company Xunlei Faces Class-Action for Disguising ICOChen Lei additionally criticized preliminary coin choices and advocated for better regulatory motion to be taken towards such, stating “ICOs are terrible, and give a bad name to blockchain technology. Governments should clamp down on these practices – a crackdown is the only way blockchain can rebuild its reputation.” Mr. Lei added: “We have been very straight on our business practices – we do not sell tokens.”

China’s National Internet Finance Association (NIFA), a self-regulatory physique established by the People’s Bank of China and approved by China’s State Council, carried out an investigation into Xunlei’s token distribution, concluding in January the corporate had evaded rules by means of conducting an “initial miner offering.”

NIFA stated “In the case of Lianke issued by Xunlei, for example, the issuing company in effect substitutes Lianke for the duty to pay back project contributors with legal tender, making it essentially a financing activity and a form of disguised ICO. In addition, with frequent promotional activities and publishing of trading tutorials, Xunlei has lured many citizens without sound discernment into IMO activities.”

Xunlei Shares Bounce After Blockchain Launch

Nasdaq-Listed Company Xunlei Faces Class-Action for Disguising ICODespite the controversy and ongoing class-action lawsuits, Xunlie’s inventory has bounced in latest days following the corporate’s announcement that its “Thunderchain” blockchain platform designed to facilitate the event of decentralized functions has been launched.

Xunlei’s shares (XNET) are presently buying and selling at $13.46, after retracing from highs of $14 on the 20th of April.

Do you assume that Xunlei shall be profitable in evading ICO standing concerning its Linktoken issuance? Share your ideas within the feedback part beneath

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