Helbiz Inc. is facing a class-action lawsuit from investors over its plan to destroy the smart contract behind its ERC-20 token, HelbizCoin (HBZ). The electric scooter company initially claimed to have raised nearly USD 40 million for a crypto-currency billed to change the transportation economy by 2017.
In a July 6 memorandum filed by the plaintiffs in support of their application for a temporary restraining order and preliminary injunction against the company, the investors claim to represent approximately 20,000 people who now face permanent destruction of their private property.
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The applicants claim that HBZ is orchestrating the destruction of its token in order to ‚close the books on cryptomoney liability and make way for the issue of shares in an [initial public offering] IPO‘.
HelbizCoin investors face token destruction
Since HelbizCoin is planning to terminate the smart contract that supports HBZ, the order seeks to prevent the defendants from „destroying the computer code that allows [HBZ] to exist.
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The memorandum states that the destruction of the contract would involve „an invasion and conversion of personal property (at a minimum).
The plaintiffs also argue that „the threat of destruction of personal property is a well-established basis for an injunction,“ emphasizing that once destroyed „the contract
The defendants have alleged that the contracts are not controlled by „the party HBZ Systems PTE LTD“, however, the applicants claim that such representation is „false“.
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The Italian-American company announced plans for an initial public offering in June 2019, the same month that Italy’s Minister of Transport allowed micro-mobility companies to operate in cities participating in an e-scooter trial.
However, the plaintiffs claim that the IPO has taken place at the expense of HBZ investors, and accuse the defendants of „distancing themselves from the currency since its value fell by more than 99%“.