The EOS Foundation plans to file a lawsuit against blockchain developer Block.one, accusing his ex-partner of negligence and fraud, which led to the low growth rate of EOS.
The EOS Foundation is seeking damages from Block.one worth $4.1 billion for the way the company conducted the initial offering of EOS coins in 2017. The EOS block producers had previously voted to end their partnership with Block.one after failing to reach a compromise with the company.
EOS Foundation CEO Yves La Rose announced that the organization wants to sue Block.one for how it handled and spent the funds raised from its 2017 ICO. In a tweet revealing the foundation’s intentions, La Rose stated that he shares the EOS community’s disappointment regarding the broken promises and that legal action is currently underway to recover $4.1 billion in damages.
Block.one is the company that helped lead EOS through the 2017 ICO, raising over $4 billion through the public sale of EOS tokens. Many in the EOS community believe that Block.one is responsible for the weak performance of EOS over the past five years (EOS peaked at $22.71 in April 2018 and is now trading 88% below its high). “At this point, it is the consensus of the majority of token holders that I speak to, inside and outside of EOS, that Block.one knowingly misrepresented their capabilities and this amounts to negligence and fraud,” La Rose said in November 2021.
In December, EOS block producers voted to stop issuing EOS tokens for Block.one, depriving the company of 67 million EOS tokens scheduled to be unlocked over the next six to seven years.
“In November and December 2021 we engaged in negotiations with Block.one to attempt to arrange a fair and reasonable resolution with Block.one that would position the EOS community for future success. Unfortunately Block.one decided to walk away from the negotiations and as a result the EOS Block Producers determined it was in the best interest of the community to freeze the vesting of all the EOS tokens that Block.one was to earn in the future,” the EOS Foundation said.
In November 2021, Yves La Rose noted that EOS in its current form was a “failure” and its native currency is a “terrible investment.”