A potential legal battle is brewing within the EOS Network community as the founder of the EOS Network Foundation, Yves La Rose, suggested that legal action could be taken against major investor Block.one (B1). In a letter dated May 20, La Rose stated that B1 allegedly reneged on its promise to invest $1 billion in the EOS ecosystem during the network’s initial coin offering (ICO) back in January 2018. As a result, La Rose wrote that the EOS Network is under-capitalized and its development significantly hindered.
Supporters of this legal action believe that the EOS token’s decline in value is a direct consequence of these broken promises. The EOS token, currently trading at $0.85, has experienced a slump of 32% since April 14, with a further 2.5% drop in the last 24 hours, according to TradingView data. Many EOS token holders purchased their tokens with the expectation of ongoing investment in the EOS ecosystem, which has not come to fruition.
La Rose offered two options to hold B1 accountable for its alleged failure to deliver on its promises: legal action or a hard fork to exclude EOS tokens held by B1 and entirely disassociate the EOS Network from its former backer. If enough token holders wish to pursue legal action, La Rose claims that a class-action lawsuit is possible and the EOS Network Foundation is prepared to assist in bringing EOS token holders together for the purpose of advancing a claim against B1.
However, it is crucial to note that taking legal action or opting for a hard fork both come with their own set of risks and repercussions. Legal proceedings can be lengthy, time-consuming, and costly, potentially further jeopardizing the EOS Network’s financial stability. On the other hand, a hard fork could lead to divisiveness within the EOS community and weaken overall confidence in the project.
Critics argue that B1 shifted its interests and capital to the cryptocurrency exchange Bullish, which it unveiled in May 2021. They claim that this move played a significant role in the EOS Network’s current undercapitalization and hindrance in development. The Foundation first considered legal action in February 2022, seeking $4.1 billion in damages. B1 has not yet responded to CoinDesk’s request for comment regarding this matter.
It is no secret that the EOS Network is currently facing challenges, and the community will need to carefully weigh its options to determine the best course of action. Whether it is through legal proceedings or a hard fork, the community must prioritize the project’s long-term stability and development in the face of adversity.
Source: Coindesk
