Frequently Asked Questions

  1. What is this lawsuit about?

    This Litigation is a securities class action first filed on January 31, 2019 on behalf of all persons who purchased or acquired ELA Tokens in domestic transactions in the Elastos ICO, the Lock-In Program, or the secondary market between January 1, 2018 and July 27, 2023, and were damaged thereby.

    On May 26, 2020, the Court appointed Mark Owen and James Wandling as Lead Plaintiffs and Bleichmar, Fonti & Auld LLP as lead counsel. (ECF No. 52.)

    Lead Plaintiffs filed the operative Amended Complaint for Violations of the Federal Securities Laws (the “Complaint”) on July 29, 2020. (ECF No. 68.) The Complaint alleges violations of Sections 5 and 12(a)(1) of the Securities Act of 1933 (the “Securities Act”) by Defendants and Section 15 of the Securities Act by Rong Chen and Feng Han. Lead Plaintiffs alleged that Defendants offered and sold unregistered securities in the form of cryptocurrency tokens called ELA Tokens (“ELA Tokens”) in violation of the Securities Act. Lead Plaintiffs further allege that Defendants offered and sold the ELA Tokens via an Initial Coin Offering (or “ICO”) in January 2018, in which investors paid Defendants BTC or NEO in exchange for ELA Tokens; a so-called “Lock-In Program,” pursuant to which investors agreed not to sell their tokens for a pre-specified amount of time in exchange for accruing interest in the form of additional ELA Tokens; and secondary market digital asset exchanges.

    On December 9, 2021, the Court denied Defendants’ motion to dismiss the Complaint. (ECF No. 87.) Defendants filed their answers on January 13, 2022, which denied all claims alleged in the Complaint and asserted multiple defenses thereto. (ECF Nos. 94, 95, 96.)

    Lead Plaintiffs and Defendants then engaged in extensive discovery. Lead Plaintiffs requested documents from Defendants, Elastos’ attorneys, cryptocurrency exchanges, certain consultants, and other third parties, resulting in substantial document productions. The parties engaged in several discovery disputes and countless meet-and-confer conferences. They litigated before the Court a discovery dispute involving the withholding of discovery pursuant to the Personal Information Protection Law of the People's Republic of China (PIPL). Lead Plaintiffs deposed four current or former Elastos personnel and consultants, including Defendant Feng Han, at the time this Settlement was reached, and were preparing for two additional fact witness depositions, including of Defendant Rong Chen, and two 30(b)(6) depositions. Lead Plaintiffs also served extensive written discovery.

    The parties engaged in two Settlement conferences before mediator Robert A. Meyer. The first Settlement conference was held on September 7, 2022. Prior to that Settlement conference, the parties exchanged Settlement conference statements with exhibits. A second Settlement conference was held on April 28, 2023, but the parties were still unable to reach an agreement. Following numerous further teleconferences with Mediator Meyer over the following weeks, the parties accepted Mediator Meyer’s recommendation to settle the case, reaching a Settlement in principle on the terms set forth herein, subject to the approval of the Court.

    On August 23, 2023, the Court entered an order preliminarily approving the proposed Settlement, approving the Notice, setting deadlines, and scheduling the Settlement Hearing to consider whether to grant final approval of the Settlement.

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  2. Why is there a Settlement?

    Lead Plaintiffs made claims against Defendants on behalf of Class Members. Defendants deny that they have done anything wrong or violated any statute and admit no liability. No court has decided in favor of the Defendants or the Class. Instead, all parties agreed to the Settlement to avoid the costs and risks of further litigation, including trial and post-trial appeals, and Lead Plaintiffs agreed to the Settlement to ensure that Class Members will receive compensation. Lead Plaintiffs and Class Counsel all believe the Settlement is in the best interest of all Class Members in light of the real possibility that continued litigation could result in no recovery at all.

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  3. Am I included in the Settlement Class?

    For purposes of the Settlement, the Court directed that everyone who fits this description is a Class Member: All Persons who purchased or acquired ELA Tokens in domestic transactions in the Elastos ICO, the Lock-In Program, or the secondary market between January 1, 2018 and July 27, 2023, and were damaged thereby, except those Persons and entities that are excluded.

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  4. What can I receive under the Settlement?

    A Settlement has been reached in the Litigation between Lead Plaintiffs and Defendants, the terms and conditions of which are set forth in the Stipulation and the Exhibits thereto. The following description of the proposed Settlement is only a summary, and reference is made to the text of the Stipulation, on file with the Court or accessible here, for a full statement of its provisions.

    The Settlement Fund consists of Two Million Dollars ($2,000,000.00) in cash, plus any interest earned thereon.

    The Settlement Fund will be used to pay expenses for the Litigation, to pay for this Notice and the processing of claims submitted by Class Members, to pay Taxes and Tax Expenses, and to pay attorneys’ fees.

    The balance of the Settlement Fund (the “Net Settlement Fund”) will be distributed, in accordance with the Plan of Allocation described in the Notice, to Class Members who submitted valid and timely Proofs of Claim.

    The effectiveness of the Settlement is subject to a number of conditions and reference to the Stipulation is made for further particulars regarding these conditions.

    Your share of the fund will depend on several things, including how many Class Members submitted a timely and valid Proof of Claim, the total dollar amount of the claims represented by the valid Proofs of Claim that Class Members sent in, the number of ELA Tokens you purchased or acquired, how much you paid for the tokens, when you purchased or acquired them, and if you sold your tokens and for how much.

    By following the instructions in the Plan of Allocation, you can calculate your claim. It is unlikely that you will get a payment for the full amount of your claim. After all Class Members have sent in their Proofs of Claim, the payment you get will be a part of the Net Settlement Fund equal to your claim divided by the total of all valid claimants’ claims. (See the Plan of Allocation in the Notice for more information on your claim.)

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  5. How do I get my Settlement award?

    You must have submitted a Proof of Claim as described below. If you chose this option, you will share in the proceeds of the proposed Settlement if your claim was timely, valid, and entitled to a distribution under the Plan of Allocation described in the Notice and you are bound by the Judgment and release entered by the Court as described in the Notice.

    TO PARTICIPATE IN THE DISTRIBUTION OF THE NET SETTLEMENT FUND, YOU MUST HAVE TIMELY SUBMITTED A PROOF OF CLAIM. The deadline to submit a proof of Claim form has now passed. Unless the Court orders otherwise, if you have not timely submitted a valid Proof of Claim, you are barred from receiving any payments from the Net Settlement Fund, but will in all other respects be bound by the provisions of the Stipulation and the Judgment.

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  6. In return for these Settlement benefits, what am I giving up?

    If you did not make a valid and timely request in writing to be excluded from the Class (see FAQ 9), you will be bound by any and all determinations or judgments in the Litigation in connection with the Settlement entered into or approved by the Court, whether favorable or unfavorable to the Class, and you shall be deemed to have, and by operation of the Judgment shall have, fully released all of the Released Claims against the Released Defendants, whether or not you submitted a valid Proof of Claim.

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  7. What is the difference between objecting to and excluding myself from the Settlement?

    Objecting is telling the Court that you do not like something about the proposed Settlement, the Plan of Allocation, or the attorneys’ fee and expense application. You can object only if you stay in the Class. Excluding yourself is telling the Court that you do not want to be part of the Class. Do not submit both an objection and a request for exclusion. If you submit an objection and a request for exclusion, your objection will be disregarded, and you will be excluded from the Class.

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  8. How do I tell the Court that I do not like the Settlement?

    The deadline to file an objection with the court was December 1, 2023. All objections, papers, and briefs had to be received or filed, not simply postmarked, on or before December 1, 2023.

    Any Class Member who did not timely and properly make their objection shall be deemed to have waived such objection and shall be foreclosed from making any objection to the fairness or adequacy of the proposed Settlement, to the Plan of Allocation, or to the award of attorneys’ fees and expenses, unless otherwise ordered by the Court.

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  9. How do I exclude myself from this lawsuit?

    The deadline to submit a request to be excluded from the lawsuit was December 1, 2023. No further opportunity to request exclusion will be given in the Litigation.

    If you chose to be excluded from the class, meaning that you opted out of the lawsuit and timely submitted a proper request for exclusion, (a) you are not entitled to share in the proceeds of the Settlement described herein; (b) you are not bound by any judgment entered in the Litigation; and (c) you are not precluded by the Settlement from otherwise prosecuting an individual claim against Defendants, if timely and at your own expense, based on the matters complained of in the Litigation.

    If you missed the deadline to be excluded and want to bring your own lawsuit based on the matters alleged in the Litigation, you should consult an attorney and discuss whether it is too late to pursue your individual claim because it may be time-barred by the applicable statutes of limitations or repose.

    If you are excluded and pursue your own individual action, you may also have to produce information and/or documents upon the Defendants’ request (a process known as “discovery”), which could include, but not be limited to, providing testimony under oath.

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  10. If I exclude myself, can I still get payment from the Settlement?

    No. If you excluded yourself, you may not send in a Proof of Claim to ask for any money.

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  11. Do I have a lawyer in this case?

    The Court appointed the law firm of Bleichmar Fonti & Auld LLP to represent the Settlement Class in this Litigation, including you (assuming you are a Class Member). These lawyers are called Settlement Class Counsel.

    You will not be charged for these lawyers. They will be paid from the Settlement Fund to the extent the Court approved their application for fees and expenses. If you want to be represented by your own lawyer, you may hire one at your own expense.

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  12. When will the Court decide whether to approve the Settlement?

    The Settlement Hearing was held on Friday, December 22, 2023. After the Settlement Hearing, on December 26, 2023 the court entered its Order Granting Final Approval and Attorneys’ Fees and Expenses, approving the Settlement and Plan of Allocation as well as approving Lead Plaintiff’s application for attorneys’ fees and expenses.

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  13. May I speak at the Settlement Hearing?

    The Settlement hearing was on December 22, 2023.

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  14. Do I have to come to the Settlement Hearing?

    The Settlement Hearing was held on December 22, 2023. You did not have to come to the hearing. Settlement Class Counsel answered any questions the Court may have had on behalf of the class members.

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  15. Where can I find the conversion rates referenced in paragraph 11 of the Plan of Allocation?

    You can download a copy of the conversion table posted on the Documents tab of the Settlement Website located here. This table lists the applicable conversion rates for BTC, NEO, and USD during the Class Period.

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