Irish cannabidiol startup joins class action lawsuit against US crypto firm

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Irish tech startup Greentech Holdings is among hundreds of plaintiffs in the United States suing blockchain company StrongBlock.

trongBlock has developed a blockchain platform and sold investors cryptocurrency tokens and nodes that can be mined on the platform.

The plaintiffs claim that StrongBlocks tokens are unregistered securities and that the company capped the rewards it would pay out to investors if the terms of their investments changed materially.

Greentech Holdings is a Meath-based startup creating an e-commerce service for cannabidiol (CBD) products that are traded using cryptocurrency. The startup operates under the Greenheart CBD brand and recently raised 500,000 from investors.

Greentech Holdings and its co-founder Mark Canavan are each named as plaintiffs in the lawsuit filed in late December in the Southern District of New York.

According to the complaint, Greentech spent over $1.1 million ($1 million) on StrongBlock tokens and nodes. Canavan declined to comment.

The plaintiffs claim that investors who bought StrongBlock tokens and nodes did so in the hope of making a profit when the value of the tokens rose. A person who has purchased a node, which is required to operate the platform, can expect to be rewarded for this with more tokens.

However, a cap on rewards imposed by StrongBlock last April inhibited that earning potential, they say.

The plaintiffs also claim that the tokens are considered securities and therefore should have been registered with the United States Securities and Exchange Commission (SEC).

StrongBlock chief executive David Moss denies the claims made in the complaint.

We are confident that nothing inappropriate has occurred regarding StrongBlock and are confident that the matter will be resolved in our favor, he said.

The plaintiffs, made up of individuals and businesses, are seeking compensatory damages of at least $22.3 million.

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