The ongoing Nano saga has taken another twist with a token holder dropping his case.
An ongoing lawsuit involving crypto project Nano has taken another turn this week when the developers sought a sanction after the plaintiff dropped the case.
The Nano team is after $701,000 in attorney fees and costs as a sanction after a token buyer dropped his proposed class action. On July 27, its legal team told a California federal court that some of the claims against them had been “legally baseless”, according to Law360.
Token buyer Alec Otto had accused the Nano developers of fraud, violating securities laws and other offenses, in connection with the loss of millions of tokens following the BitGrail exchange hack in 2018.
The developers stated that Otto’s class action claims were filed too late, at least one filing contained allegations unsupported by evidence and that he advanced a series of “absurd and/or clearly legally meritless arguments,” adding:
“Mr. Otto’s deposition testimony revealed that he has no idea how many XRB he purchased, when he purchased them, or how many were left on BitGrail when it closed.”
There have been a number of lawsuits targeting Nano going back three years when it was known as RaiBlocks. On February 8, 2018, 15 million XRB — the former native currency of the Nano network — were stolen from the Italian cryptocurrency exchange BitGrail.
Shortly after the $150 million hack, BitGrail’s owner and operator, Francesco Firano, asked Nano to alter its blockchain to cover the losses.
The Nano core development team then accused BitGrail of being insolvent and negligent in managing funds which had resulted in the incursion.
The plot thickened when Firano pointed the finger at Nano, blaming an issue with its protocol and timestamp technology.
Neither party took full responsibility, consequently, a number of individual token holders, including Alex Brola, have tried to sue Nano for their losses since. Brola’s case was dismissed by a New York District Judge in October 2018.
Otto first tried to certify his suit as a class action in August 2020, then again in December, before deciding to withdraw it last month. U.S. District Judge Yvonne Gonzalez Rogers approved the voluntary dismissal but requested a briefing on whether Otto and his counsel should face sanctions.
Nano developers have asked that Otto, and all three law firms representing him, be held jointly responsible for their hefty $700K legal costs. Otto and his counsel had yet to file a response at the time of writing.