Helbiz Inc is facing a class-action lawsuit from investors for its plan to destroy the smart contract underpinning its ERC-20 token, HelbizCoin (HBZ). The electric scooter company initially claimed to have raised almost $40 million dollars for a cryptocurrency billed to disrupt the ride-sharing economy in 2017.
In a July 6 memorandum filed by the plaintiffs in support of their request for a temporary restraining order and preliminary injunction against the firm, the investors claim to represent approximately 20,000 individuals who now face the permanent destruction of their private property.
The plaintiffs assert that HBZ is orchestrating the destruction of its token to “close the books on the cryptocurrency liability and make way for them to issue stock in an [initial public offering] IPO.”
HelbizCoin investors face token destruction
With HelbizCoin planning to terminate the smart contract underpinning HBZ, the order seeks to prevent the defendants from “destroying the computer code that allows [HBZ] to exist.”
The memorandum asserts that the contract’s destruction would comprise “a trespass and conversion of personal property (at minimum).”
Plaintiffs also argue that “the threatened destruction of personal property is a well-established basis for an injunction,” emphasizing that once destroyed, “the contract […] can never be restored.”
The defendants have claimed that the contracts are controlled by “the non-party HBZ Systems PTE LTD,” however, the plaintiffs assert that said representation is “false.”
Crypto-powered scooter company plans IPO
The Italian-American company announced plans for an IPO in June 2019, the same month that Italy’s Minister of Transportation permitted micro-mobility businesses to operate in cities participating in an e-scooter trial.
However, plaintiffs assert that the IPO has come at the expense of HBZ investors, with the defendants accused of “distancing themselves from the coin ever since its value dropped by over 99%.”