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Why the EOS Cryptocurrency Soared 19% as the Market Taken a Break Today

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Why the EOS Cryptocurrency Soared 19% as the Market Taken a Break Today

What happened

On an otherwise calm day in the cryptocurrency market, EOS (EOS -11.27%) is an absolutely skyrocketing token. As of 12:30 p.m. ET, EOS is up 19% over the past 24 hours.

The move follows an interesting court ruling this week in which a judge in the Southern District of New York rejected a settlement between Block.one (the company that originally designed the EOS network) and investors. The $27.5 million settlement, which was proposed by Block.one and agreed to in June this year, stems from a dispute with investors over whether an initial coin offering in 2018 constituted an offering. unregistered titles.

Other crypto projects have been mired in scrutiny from regulators and investors over alleged unregistered securities offerings, but this settlement was one of the largest the crypto community has seen. Additionally, it is important to note that Block.one has also settled with the United States Securities and Exchange Commission for $24 million over the same allegations.

So what

As the company sought to settle these claims to focus on advancing its blockchain efforts, it’s clear investors are paying close attention to what the move could mean for various projects struggling with legal issues. The fact that EOS is surging on the back of this news indicates that investors are realizing that the downward pressure from this headwind may be over.

Now, EOS is not the only token that has been caught up in allegations of unregistered securities offerings. Other projects, including XRP, are fighting similar battles. That said, the rather massive $4 billion raise that Block.one managed to achieve in 2018, then the largest ever, made a settlement more likely. The ability of other projects to settle, given the limited liquidity, remains uncertain.

Now what

The reason why this settlement was rejected – that the party representing the investors did not “adequately represent the interests of all investors” – is interesting. From there, it will be interesting to see how this decision impacts ongoing litigation with other projects. Investors are clearly watching these cases closely, and EOS is one token that could represent the upside following potentially positive future moves for other struggling crypto projects.

Chris MacDonald has no position in the stocks mentioned. The Motley Fool has no position in the stocks mentioned. The Motley Fool has a disclosure policy.

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