‘The Game’ faces $12M judgment over unregistered ICO sale promotion
A U.S.-based musician is facing a $12 million judgment in a California court in connection with his promotion of an unregistered ICO project. Jayceon Taylor, popularly known as The Game, promoted ParagonCoin, a blockchain project that claimed to be out to change the world of cannabis. However, it has since then collapsed under the weight of legal battles and its founders have declared bankruptcy and fled the United States.
ParagonCoin was one of the many ICO projects that sprung up during the unprecedented ICO craze of 2017. It targeted the weed industry, claiming its PRG tokens would become the payment method of choice for the industry. In its August 2017 ICO, the project purportedly raised $12 million from investors by selling its PRG tokens. The U.S. Securities and Exchange Commission (SEC) came after the project over alleged securities violations, while its investors sued ParagonCoin founders and team members.
Taylor was one of the targets for the investors who sued the founders three years ago. However, the court dismissed him as the plaintiffs were unable to prove that he was a team member or employee of ParagonCoin.
However, in an amended complaint by Astley Davy, who’s one of the investors, Taylor is now facing similar judgment to the founders. Judge Jeffrey White has determined that the rapper should be included in the judgment.
“…the Court is persuaded the allegations are sufficient to show that Taylor acted for his own gain or for Paragon’s gain and, thus, could be considered a statutory seller,” Judge White ruled.
Davy, who represents the other investors, alleged in his amended complaint that ParagonCoin employed The Game as a celebrity endorser to solicit investments.
The plaintiff also claimed that the rapper would be considered a team member and that in the ParagonCoin white paper, it stated that “‘[f]ounders and team members’ would be prohibited from ‘liquidating’ more than 20% of their PRG Tokens in the first calendar year, as this would ‘keep a stable token price’ and ‘keep[] their interests aligned with the Paragon community.’”
The Grammy-nominated rapper is now liable for $12 million plus pre- and post-judgment interest. He now faces the same fate as the projects founders, celebrity couple Jessica VerSteeg and Egor Lavrov.
On its website, ParagonCoin claimed that its securities violations were due to the misguiding legal advice from its lawyers. “We did our best to launch the product, but most of our resources were allocated to legal battles and compliance requirements,” the company stated.
The team goes on to reveal that it has filed for bankruptcy.
Some reports further reveal that the two founders have been unresponsive for the past few years. They allegedly fled the U.S. and were reportedly last seen in Kiev, Ukraine.
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