In brief

  • Tether and Block.one co-founder Brock Pierce is running for president.
  • He is also a defendant in a class action lawsuit for securities fraud related to his role formulating EOS.
  • He was served with court papers today at a campaign rally.

Donald Trump and Joe Biden aren’t the only two candidates running to be president this year. Further down on some state ballots, past the likes of Libertarian Jo Jorgensen and musician Kanye West, is Tether co-founder (and Mighty Duck) Brock Pierce.

Running for president has left Pierce open not only to critiques of his campaign platform but also to attacks on his role in the creation of a blockchain platform, EOS.

While shaking hands at a campaign rally marking the opening of his New York City headquarters, Pierce was served a court summons by a masked bystander.

James Koutoulas, CEO of Typhon Capital Management and part of the lead counsel for a lawsuit against Pierce, confirmed via email to Decrypt that the service was related to a securities fraud class action.

According to Koutoulas, “Brock had refused to accept service from us through his counsel so we had a process server serve him at a rally for his presidential campaign.”

That officially notifies him of a class action filed in federal court this May on behalf of anyone who bought or received EOS tokens between June 2017 and the current date.

The class action “alleges breach of fiduciary duty and unjust enrichment by defendants, who comprise both current and former company executives." In addition to Pierce, it named Block.one co-founders Brendan Blumer and Daniel Larimer, as well as a colleague, Ian Grigg.

The team alleges that Block.one, the brains behind the EOS blockchain, did not register the EOS token sale, which raised roughly $4 billion in Ether, with the US Securities and Exchange Commission. Moreover, the complaint alleges that the defendants kept investors in the dark about its operations and even about being investigated by the SEC, which ultimately settled a complaint with Block.one for $24 million.

Koutoulas told Decrypt that his groupwhich is led by Grant & Eisenhofer and also includes the Northwestern Law School Investor Protection Center and litigator Jenny Vatrenkowas appointed lead counsel on behalf of the Crypto Assets Opportunity Fund, which will be the lead plaintiff in the class action. 

The next step?

“We will be filing an amended complaint soon,” he said, before making a prediction. “Then block.one will try to file a motion to dismiss. If the case survives that motion, then the class certification process begins in earnest to establish who exactly lost money due to block.one’s misconduct, and exactly how much.”

Either way, the process will probably last longer than Pierce’s presidential campaign.