Crypto Startup Lets You Fund Other People’s Lawsuits Against Each Other

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The friends of crypto are back, and this time they’re trying to help the rich make money from other people’s lawsuits.

As Vice reports, startup Ryvval is “disrupting” the world of litigation finance to gamify the US justice system in a way that will benefit, at least nominally, litigants as well as investors.

First, some information on litigation financing. Half game and half fundraiser, the litigation funding process is a way for those with the cash to help those who haven’t funded their lawsuits – and in return, they get a share of the potential settlements. that applicants receive.

A booming industry, litigation finance has had its own crypto ‘disruptors’ over the past year via Initial Litigation Offers (ILOs), which echo the concept and crypto-trust by allowing retail investors to find and finance business on the blockchain.

Launched in late 2020 on the Avalanche blockchain, the first OIT allows investors to buy “litigation tokens” in the case of Apothio, LLC, a California cannabis producer who is suing his county for destroying 500 acres of crops. The deal has stalled since early 2021, but that hasn’t stopped investors from putting more than $ 330,000 into the deal, which is well above his fundraising target of $ 250. $ 000.

Now, Vice reports that Ryvval, which was co-founded by attorney Kyle Roche, is building on the concept of the ILO – which Roche helped create – by creating a platform that allows individuals to invest in ILO judicial affairs.

While Roche told Vice that “Ryval’s goal is to make access to justice more affordable” and that it wants to “make the federal justice system more accessible for all,” the startup’s website – who is always in “subscribe for more information” mode – sings a different tune, much more geared towards people who want to take advantage of these cases.

The site boasts that investors will be able to “access a multi-billion dollar investment class previously inaccessible to the public,” although, as Roche told Insider, only “accredited investors” (e.g. wealthy, corporations and other entities, the Securities and Exchange Commission deems eligible for regulatory exemption) will be able to trade immediately, while the less prestigious will be subject to a one-year freeze on their accounts.

Notably, the Ryval platform does not yet exist, but its co-founder hopes that it will be operational by the end of the first quarter. So far, it looks like Apothio is the only ILO listed on the stock exchange, but Roche hopes to have between five and ten more by the time the platform is created and launched.

When you eliminate the financial and legal language, the concept of OITs is intriguing. The prospect of Good Samaritans helping those without access to the capital to pursue businesses or governments is exciting, and the idea of ​​aligning incentives between the needy and the rich is catnip for capitalists. – but, at the same time, the propensity for corruption seems particularly high given that crypto and crowdfunding are already bogged down by crooks.

It remains to be seen whether Ryval and his inevitable imitators will do any good or simply become another point in the super-fast radar of the crypto world.

READ MORE: Tech Startup wants to gamify lawsuits against people using crypto tokens [Vice]

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