Jessica VerSteeg former beauty Queen started an entity, established in July 2017, to “deploy a suite of blockchain enabled products to organize, systematize and bring verification and stability to the cannabis industry.”
On August 15, 2017, Paragon released a White Paper (the “White Paper”) on its website and social media websites describing its planned business model and upcoming token sale.
Paragon’s mission was to to “pull the cannabis community from marginalized to mainstream by building blockchain into every step of the cannabis industry and by working toward full legalization.”
But things didn't go as expected, the company raised $70 million and today andthe company is facing a class action suit claiming that Paragon violated federal securities laws.
Paragon Coin originally faced a lawsuit filed against the brand and its owners Jessica VerSteeg and her husband Egor Lavrov for allegedly violating Securities law with regards to the Paragon Initial Coin Offering (ICO).
The lawsuit stated that on November 2, 2017, Paragon ICO investors received an email updating them 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. Unfortunately, these amounts did not include any of the cryptocurrencies they collected during the Paragon ICO “presale.”
Paragon’s Headaches Continue
Even though Paragon settled with the SEC, the investors are still upset as they apparently haven’t received anything.
Cannabis Law Report said that, “While the suit argues that ParagonCoin claimed to have issued PRG from its headquarters in California, Judge White noted that “the ICO giving rise to plaintiffs’ claims and purchases of PRG tokens were conducted over the internet.”
“Plaintiffs concede there may be class members in all 50 states and concede that laws governing the state law claim at issue differ among jurisdictions in such a way that a true conflict exists,” the judge added.