Nano seeks a $701K sanction against Alec Otto after dropping his suit

By: Jinia Shawdagor
Jinia Shawdagor
Jinia is a cryptocurrency and blockchain enthusiast based in Sweden. She loves everything positive, travelling, and extracting joy and… read more.
on Jul 29, 2021
  • According to Nano, Alec Otto filed the case too late, and his allegations lacked legal merit.
  • Nano asks that Otto and his legal team raise $701,000 to cover the costs incurred in the case.
  • Alex Brola also took Nano to court in April 2018, only to drop his case a few months later.

The developers of the Nano (NANO/USD) cryptocurrency are seeking $701,000.00 (£502,300.00) in attorney fees and costs as a sanction against token holder Alec Otto who let go of his proposed lawsuit. A report unveiled this news on July 28, noting that the company’s legal team told a California federal court that the allegations against Nano were legally baseless. Reportedly, Otto filed a class-action lawsuit against Nano developer, alleging fraud, violation of securities laws, among other faults.

According to the report, Otto’s claims were connected to the 2018 BitGrail exchange hack, which resulted in the loss of 15 million tokens worth $150.00 million (£107.48 million). He first tried to certify his allegations against Nano as a class-action lawsuit in August 2020, followed by another attempt in December. Otto eventually decided to walk back on the case in the past month.

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US District Judge Yvonne Gonzales approved the voluntary dismissal and requested a briefing on whether the plaintiff and his legal team should face sanctions. To this end, Nano developers have requested that Otto and the three law firms that represented him in the case join forces to raise the aforementioned amount.

Nano claims Otto’s allegations are baseless

While filing for the sanctions against Otto and his legal team, Nano argued that the plaintiff filed the case too late, adding that at least one filing comprised claims with evidence backing. On top of this, Nano said Otto’s made a series of absurd and/or clearly legally meritless arguments.

Nano further cited that Otto’s deposition testimony unveiled that he had no factual information regarding his XRB tokens at the time. According to the company, the plaintiff had no idea of the amount of XRB he purchased when he bought the tokens or the number of tokens that remained on BitGrail after it shut down.

Notably, this is not the first time someone has taken Nano to the court regarding the loss of the tokens. At the time of the hack, Nano was going under RaiBlocks, and XRB was its native token. Neither BitGrail nor Nano took full responsibility for the vulnerabilities that led to the attack. As a result, people have been coming after Nano, trying to recover the losses they incurred.

Apart from Otto, Alex Brola, a Nano investor, filed a lawsuit against the company in 2018. Like Otto, Brola also voluntarily withdrew his suit, forcing New York District Judge Nina Gershon to throw the case out of court.

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