Brock Pierce, the former Disney child actor turned cryptocurrency billionaire and independent U.S. presidential candidate, was served with a subpoena during his campaign rally in New York City on Monday. The class-action lawsuit, originally filed in May 2020, alleges that Pierce and other executives behind the EOS blockchain project defrauded global investors by selling unregistered securities through the initial coin offering (ICO) that raised approximately $4 billion.
Rally Interrupted: Subpoena Served in Front of Supporters
A video posted by James Koutoulas, CEO of Typhon Capital Management and a member of the plaintiff’s legal team, shows Pierce shaking hands with attendees when a process server approaches and hands him a stack of legal documents. “Our team served Brock Pierce for securities fraud at his rally in NYC,” Koutoulas tweeted. “Pro tip- when you’re trying to avoid getting served for a multi B fraud case, maybe lay off outlandish presidential campaigns.” Pierce did not respond publicly to the lawsuit but later thanked supporters on social media, adding that he was “glad to see that my candidacy is being taken so seriously” after the New York Post featured his campaign on its front page.
The EOS ICO Class Action: Allegations of Massive Fraud
The lawsuit, filed in the Southern District of New York on behalf of anyone who purchased or received EOS tokens during the June 2017 ICO, names Pierce alongside Block.one co-founders Daniel Larimer and Brendan Blumer as defendants. The complaint states that Block.one, registered in the Cayman Islands but operating from Hong Kong and Virginia, sold 900 million EOS tokens without registering with the U.S. Securities and Exchange Commission (SEC) or seeking an exemption. The plaintiffs argue that the company “aggressively marketed to investors in the United States and other countries” and ultimately left them with “an unregulated asset that became virtually worthless.” The filing accuses the defendants of orchestrating “what may be the biggest of all crypto frauds.”
Block.one’s Previous SEC Settlement: A Mere Slap on the Wrist?
In 2019, Block.one reached a $24 million settlement with the SEC over the same ICO, representing only 0.6% of the $4 billion raised. The settlement did not require Block.one to admit or deny the allegations, and no individual executives were charged. James Koutoulas emphasized that the class action aims to hold the individuals accountable where the SEC failed. “Institutional funds that were lied to by Block.one have a duty to all their investors – large and small – to take action against fraudsters and con artists,” he said. The current lawsuit seeks damages and also alleges that Pierce and the other defendants misled institutional investors, including family offices and pension funds.
Brock Pierce: From Child Star to Crypto Mogul to Presidential Candidate
Pierce, 45, first gained fame as a child actor in films like “The Mighty Ducks” and “First Kid.” He later transitioned into venture capital and became a prominent figure in the cryptocurrency space, co-founding Blockchain Capital and advising numerous blockchain projects. His campaign website claims he “raised billions of dollars for companies during crypto’s early days.” In July 2020, he declared his independent run for the U.S. presidency, joining a field that includes Republican incumbent Donald Trump, Democrat Joe Biden, and hip-hop star Kanye West. The subpoena comes at a critical time for his campaign, which has struggled to gain traction in national polls.
The court has set a preliminary schedule for the lawsuit, with discovery expected to proceed over the coming months. Pierce’s legal team has not yet filed a formal response.