Paragon Coin purportedly leveraged blockchain technology for the legal cannabis industry.
According to the Complaint, from August 15, 2017 through September 15, 2017, Defendants ran the Paragon ICO “presale” during which time they purportedly “sold out” of 70,000,000 ParagonCoins (“PRG Tokens”) priced between $0.75 and $0.90 per PRG Token. From September 15, 2017 through October 16, 2017, Defendants ran the Paragon ICO “crowd sale,” during which time PRG Tokens were offered and sold for $1 each on the first day and the price thereafter increased by $0.05 per day until the close of the Paragon ICO.
On November 2, 2017, Defendants emailed Paragon ICO investors an update which indicated that during the Paragon ICO “crowd sale” they had collected 533 BTC and 8,092 ETH—worth approximately $7.3 million and $10.2 million, respectively, as of January 12, 2018. In this update, Defendants also stated that these amounts did not include any of the cryptocurrencies they collected during the Paragon ICO “presale.” Given that Defendants have represented that the Paragon ICO “presale” sold 70,000,000 PRG Tokens at a minimum price of $0.75 and that the Paragon ICO “crowd sale” raised 533 BTC and 8,092 ETH, these representations indicate that Defendants collected at least $70 million during the Paragon ICO.
The Complaint alleges that Defendants marketed the Paragon ICO as offering a path towards legalization of cannabis and a way to solve nearly every issue facing the cannabis industry. As discussed in the case, the Paragon ICO was in actuality a way for Defendants to raise capital to purchase real estate.
On May 10, 2018, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on June 22. On July 16, Plaintiffs voluntarily dismissed two of the Defendants. On September 18, Lead Plaintiff filed an amended Complaint. On September 26, the Court's Clerk entered Default as to one of the individual Defendants. Lead Plaintiff filed a second amended Complaint on June 10, 2019.
On January 21, 2020, Default was entered as to the Company Issuer and five of the Individual Defendants. On February 27, Lead Plaintiff voluntarily dismissed one of the Individual Defendants. On March 13, Default was entered as to two of the Defendants. Plaintiffs filed a Motion for Class Certification on March 30. On June 24, the Court issued an Order granting Plaintiffs' Motion to Certify a Class on the federal claims.
On June 23, 2021, the Court issued an Order granting Plaintiffs' Renewed Motion for Default Judgment and granted compensatory damages to the Plaintiffs. On June 29, Lead Plaintiff voluntarily dismissed two of the Defendants. On July 1, the Court entered final judgment.