The Founders of Unikrn, Rahul Sood and Karl Flores, are facing legal implications concerning the unlawfulness of their ICO and the way they conducted the raising of funds for their eSports gambling project. They accumulated a 30m USD investment from their ICO after registering the “offering” with the U.S. Securities and Exchange Commission as a “SAFT” (Simple Agreement for Future Tokens), under Regulation D, section 506(c).
However, a 506(c) offering is available only for accredited investors. This dictates that the company offering the investment opportunity must vet their investor’s finances and KYC. Unikrn have taken no such action and didn’t declare the registration of their ICO under 506(c) anywhere and accepted the most basic of information from their investors when purchasing during the ICO. This is in direct breach of the ruling.
The federal exemption ruling dictates that “issuers may broadly solicit and generally advertise an offering, provided that:
- The issuer takes reasonable steps to verify purchasers’ accredited investor status and certain other conditions in Regulation D are satisfied.
Purchasers in a Rule 506(c) offering receive “restricted securities”, which can be defined as: previously-issued securities held by security holders that are not freely tradable.
The Founders persistently lobbied that UKG was strictly for utility but a) offered the tokens to accredited investors pre-ICO for profit (15m USD) and not utility and b) had no utility in place for the token at ICO. Furthermore, UKG tokens bear the markings of the criteria required to fulfil the “Howey Test”, therefore establishing them as a security and cementing the breach of the federal exemption.
This class action is accepting class members
Unikrn had a long list of promises for their product, project and token, ranging from tournament hosting, to next-generation spectator engagement. They claimed to be constructing the world’s best and most immersive eSports gambling and gaming platform that would take the market by storm, but the end result was paltry, with a coin almost untraded, an underpopulated platform and weak offerings.
They endeavoured to circumvent traditional gambling laws by allowing gamblers to stake cryptocurrency instead of fiat currency and originally integrated (and still use) the “Unikoin Silver” on their platform. This is a token of no intrinsic value and cannot be bought or sold: it’s only for us in Unikrn. This offers very little incentive for the customers to bet and gamble, as they’re not gaining anything of worth.
They proposed multiple sub-platforms, such as “Unikrn Jackpot” – which to-date stands empty and unused. They also claimed they would release a revolutionary gaming platform known as “Unikrn Connekt”, that would see players wager and win UKG across a small handful of competitive titles. However, they boast the total value of UKG won since inception as 131,826UKG (at time of writing). This is just below 4000 USD and offers a direct view into how unused this platform is.
The whitepaper also bore no information in reference to the 506(c) exemption or any information pertaining to the terms of the ICO itself.
Unikrn tried effortlessly to declare their token, UKG, as being a strict utility token. However, it bears all the characteristics of a clear-cut security with no other function than a payment method. Customers could buy UKG and stake it against eSports games, or win it back to either gamble with, or sell on an Exchange: that’s it.
They claimed that the base foundation for the token would be the ability to bet on live eSports matches with it, and purchase “tickets” for raffles, as well as win small amounts when competing in games. However, given that the token has such little value on exchanges and – as previously mentioned – has been won on the platform in such little value, it’s apparent that even these fundamental aspects were not realised. Unikrn: a) has very little transaction history for UKG and b) has very little content or social media interactivity.
In their whitepaper, Unikrn neglected to disclose how funds raised during the ICO would be used and they only clarified how the tokens themselves would be allocated.
As the graphic shows, a whopping 80% of the tokens wouldn’t be released for sale and to this day, only 15% of the tokens are in active circulation, with the company still retaining 85% of the tokens, valued at approximately 30m USD. This in an indication of an ICO that has failed in its main goal:
Unikrn offered UKG to investors with the clear inference that the token would appreciate in value and ultimately become worth more than their original investment. This is a point that further confirms UKG to be a security.
The token value both climbed and crashed dramatically, transitioning from an ATH of 2.35 USD to a low of 0.05 in a matter of weeks, a difference in value of approximately 1,500%. This is due to a mismanagement of the ICO and the duping of investors who were invited to purchase the tokens as a method of making profit from their investment.
As made apparent by the whitepaper and further investigation, UKG was to be used a payment method only. As this is the case, blockchain implementation was baseless, as there are many other coins that could serve as a viable payment base for the Unikrn platform.
The token is not innovative, it’s simply an industry-standard ERC20 token
Unikrn ran their ICO with the clear intention of pulling in as many millions of dollars in funding as possible. They obtained backing from celebrities such as Mark Cuban and Ashton Kutcher to drive popularity and hype and ran their offering unlawfully and whilst in breach of federal exemptions. The graphs displayed herein display clear symptoms of a typical pump and dump scheme which all too well-known for duping investors. A well-delivering and high performing project will never show these patterns.
Today, the token remains weak on exchanges, with a value loss of 90% from ICO and the platform stands almost unused.
If you have been financially impacted by Unikrn’s ICO, please join this class action with confidence.
- MR. RAHUL SOOD
- MR. KARL FLORES
BOARD OF ADVISORS:
- MR. ANTHONY DI IORIO
- MR. SHANE FONTAINE
- MR. ERICK MILLER
Approx. funds raised:
About this ICO:
– Unlawful ICO
– 90% Value loss
– Low token trade
– Platform unused
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