- StoAmigo International, LLC v. Vanbex Group, Inc. et al.
- An employee of Vanbex promised to handle for $ 80,000
- StoAmigo alleges that paid for Vanbex the funds and received nothing in return
- StoAmigo's request for refund was denied by Vanbex
Bare-knuckled bitcoin litigation, but not the same. This week's CCM covers each of these as we look at two new crypto lawsuits, and one new opinion. [As always, Rosario summaries are “NMR” and Palley summaries are “SDP”]
Disclaimer: These summaries are provided for educational purposes only by Nelson Rosario[Twitter:[twitter:@nelsonmrosario]and Stephen Palley[Twitter:[twitter:@stephendpalley]. They are not legal advice. Present or future client or employer. Also we might change our minds. We contain multitudes. (Picture credit: https://pixabay.com/en/car-car-wreck-oldtimer-vehicle-1904648/; CC0 Creative Commons)
StoAmigo International, LLC v. Vanbex Group, Inc. et al., 2: 19-cv-00224, C.D. Ca. January 10, 2019 [NMR]
This is not your typical ICO related lawsuit. No, in this suit the plaintiff is actually an established company that already had users, and was a real live company! With a new product / service line. That's when they met the team at the Vanbex Group, and well, here we are.
Before getting into the particulars of this case it is worth briefly discussing a concept in law known as agency. Essentially, all businesses empower their employees to act on behalf of the business, whether that is signing contracts, setting up deals, representing the company to the press, etc. This delegation of power makes sense, because CEOs and other executives can not do everything. I know, within reason, the company is then responsible for the actions of the agent if the agent is acting within its authority as it is expressly given or implied. Okay, great.
In this case, Vanbex Group held itself out as a sort of one-stop shop to bring your token salt dreams to life. They will help you in the US and elsewhere, find legal counsel, talk to regulators, make sure you hit your hard cap, and all that jazz. They are often touted the success of their own token raise of $ 30 million via the Etherparty ICO.
StoAmigo alleges that they are based on these representations that they wanted to contract with the network of the blockchain network. Incidentally, they filed at least two blockchain applications on the AXEL blockchain technology. This is the first crypto lawsuit I know of that even mentions patents, but I digress.
One of Vanbex's employees, Richard Flagor, who was the executive vice president of sales at Vanbex and was the main point of contact for StoAmigo. Flagor promised that Vanbex would handle everything token. All StoAmigo had to do to lock down. Vanbex was $ 80,000 for two months of work, and an option to pay an additional $ 40,000 per month after that. I know, they signed a service agreement. They are the StoAmigo team and Vanbex CEO Kevin Hobbs. This was April 9, 2018.
StoAmigo allegedly paid the $ 80,000, and then over the next two months StoAmigo alleges that Vanbex delivered … nothing. Zip. Zilch. Bupkis. One allegation is that on April 12, 2018, the Vanbex team promoted to the Coin Center dinner in NYC, and private meetings with investors at the Consensus conference. When the StoAmigo team arrived in NYC for Blockchain Week allegedly nothing that was promised transpired.
Call on July 12, 2018, between the StoAmigo team and the Vanbex leadership including Hobbs the CEO. Allegedly, during the call Hobbs claimed, that StoAmigo had been lied to by Flagor, and apparently when StoAmigo asked for a full refund they were denied. I mean …
Generally, you can not keep people for money that they thought were paying for that they were never really delivered. I'm so curious about it. I'm so curious about it.
The Block is delighted to bring you expert cryptocurrency legal analysis courtesy of Stephen Palley (@stephendpalley) and Nelson M. Rosario (@nelsonmrosario). They summarize three cryptocurrency-related cases The Block permission to republish their commentary and analysis in full. Part I of this week's analysis, Crypto Caselaw Minute, is above.