Court rules in favor of HelbizCoin investors, class lawsuit to go ahead
A United States District Court has allowed a nearly three-year-long class action lawsuit against the creators of HelbizCoin to go ahead, as per a court ruling filed on Sept. 1.
The class action suit was first brought against Helbiz, its CEO Salvatore Palella, and its partners in 2020, with an amended complaint filed in March 2022.
The case involves an Italian electric scooter-sharing company HelBiz that raised $38.6 million in an ICO and issued an ERC-20 token with one of the founders of Ethereum, Anthony Di Iorio, in 2018, according to the complaint.
A group of investors, numbering as many as 20,000, alleged that HelbizCoin was a rug pull and fraudulent pump-and-dump scheme with the firm making false statements and promises to induce people to purchase the coins. They claimed that Helbiz kept most of the money from the ICO for itself.
On Sept. 1, the US District Court for the Southern District of New York partially ruled in favor of investors who filed the class action suit, with the court granting the motions to dismiss in part and denied them in part.
The court however dismissed all claims against certain defendants entirely, including Paysafe, Skrill, Decentral, and Alphabit, finding a lack of personal jurisdiction over Paysafe and Alphabit. The court also dismissed some claims against the remaining defendants for failure to state a claim, including breach of contract, tortious interference, and certain securities claims.
However, Judge Louis Stanton also ruled that plaintiffs adequately stated claims for fraud, price manipulation, violations of securities laws, commodities laws, the RICO (Racketeer Influenced and Corrupt Organizations) Act, and unjust enrichment against some defendants.
“Among other matters, the case found that the ERC-20 token is a security under federal law,” the investor’s lawyer Michael Kanovitz told Cointelegraph.
The investors’ lawsuit was initially dismissed by a lower court judge in January 2021, citing a 2010 Supreme Court precedent that limited the extraterritorial reach of federal securities laws, according to a report from Reuters.
However, the case was revived in October 2021 when a 2nd U.S. Circuit Court of Appeals found the lower court judge erred in its decision, and an amended complaint was filed in March 2022.
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In emailed comments to Cointelegraph, Kanovitz also pointed out that the complaint included a number of charts that use the Ethereum ledger to “prove spoof trading in the ICO.” It also included evidence of multiple “genesis wallets” that were provided to the initial investors in Ethereum, such as Mr. Di Iorio, he said before adding:
“It is a compelling story that shows how blockchain transparency can be used to flush out criminals.”
The complaint alleged that Di Iorio, an advisor to Helbiz, published false and misleading statements about the HelbizCoin ICO in Bitcoin Magazine but did not provide evidence that he made the statements.
“This is a speculative conclusion at best and thus fails to adequately allege that Di Iorio made false or misleading statements,” the ruling read.
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The man who killed MP Sir David Amess was released from the Prevent anti-terror programme “too quickly”, a review has found.
Sir David was stabbed to death by Islamic State (ISIS) supporter Ali Harbi Ali during a constituency surgery at a church hall in Leigh-on-Sea in October 2021.
The killer, who was given a whole-life sentence, had become radicalised by ISIS propaganda and had been referred to the anti-terror programme Prevent before the attack, but his case had been closed five years before.
Despite Prevent policy and guidance at the time being “mostly followed”, his case was “exited too quickly”, security minister Dan Jarvis told the House of Commons on Wednesday.
Following the publication of a review into Prevent’s handling of Southport child killer Axel Rudakubana earlier this month, Mr Jarvis said a Prevent learning review into Sir David’s killing would be released this week in a commitment to transparency over the anti-terror programme.
Matt Juke, head of counter-terrorism policing, said it is clear the management and handling of Ali’s case by Prevent “should have been better” and it is “critical” the review is acted on “so that other families are spared the pain felt by the loved ones of Sir David”.
Ali Harbi Ali was referred to Prevent twice before he stabbed Sir David to death. Pic: Met Police
The review found:
• Ali was referred to Prevent in 2014 by his school after teachers said his demeanour, appearance and behaviour changed from a previously “engaging student with a bright future” with aspirations to be a doctor to failing his A-levels and wanting to move to a “more Islamic state because he could no longer live among unbelievers”
• Prevent quickly took his case on and he was referred to Channel, part of the programme that aims to prevent involvement in extremism
• He was “exited from Prevent too quickly”, Mr Jarvis said, just five months later “after his terrorism risk was assessed as low”
• A review by police 12 months after he was released from Prevent “also found no terrorism concerns” and the case was closed. This was not uploaded for eight more months due to an “IT issue”
• People released from Prevent are meant to have a review at six and 12 months
• The assessment of Ali’s vulnerabilities “was problematic and outdated” as it did not follow the proper procedure, which led to “questionable decision-making and sub-optimal handling of the case”
• Ali’s symptoms were prioritised over addressing the underlying causes of his vulnerabilities – and support provided did not tackle those issues
• Record keeping of decisions, actions and rationale was “problematic, disjointed and lacked clarity”
• The rationale for certain decisions was “not explicit”
• Ali’s school was not involved in discussions to help determine risk and appropriate support – they were only called once to be told the “matter was being dealt with”
• A miscommunication led to only one intervention session being provided, instead of two.
Read more:
Sir David Amess’ daughter taking legal action
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Is the Prevent programme fit for purpose?
The review found most of the failures in Ali’s case would not be repeated today as the guidance and requirements are much clearer.
It said referrers, in Ali’s case his school, are kept informed and engaged, different departments and agencies – not just police – have clear roles, which records need to be kept is clear and guidance for detecting underlying vulnerabilities has changed and would have made a difference.
The review said a Prevent “intervention provider” met Ali at a McDonald’s to deal with his understanding of “haram” (forbidden under Islamic law). No risk assessment was made but they suggested one more meeting, however a breakdown in communication between police and the provider meant there were no more meetings.
Training for providers is “substantially different” now and the review says this would not be repeated today, with the provider in question saying the process is “a completely different one today”.
However, the review said there are still problems – not just in Ali’s case – with the Vulnerability Assessment Form, an “incredibly complex document that is vital to Channel” and the progression of a case.
It also found a decision by the College of Police to only hold Prevent case data for five years “may prove to be problematic” and if Ali’s case material had been deleted under that ruling “it would have been nigh on impossible to conduct this review.
Sir David’s daughter, Katie Amess, 39, last week welcomed the announcement to publish a review into Ali’s case but said every victim failed by Prevent deserves an inquiry, not just the Southport victims.
“We potentially wouldn’t be in the same situation today with repeat failings of Prevent had somebody had just listened to me back when it [her father’s killing] happened and launched a full public inquiry,” she told LBC.
Ms Amess said she believes if the Southport attack had not happened, the review into Prevent’s handling of her father’s killer would never have been released into the public domain.
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