Popular cryptocurrency wallet provider, Blockchain.info filed a lawsuit against crypto startup blockchain.io just six days before the latter begins its ICO.
The major claim is that blockchain.io is trying to use the goodwill of blockchain.info to raise enough funding through its ICO.
However, in this report, we reveal five reasons why Blockchain.info is suing blockchain.io and what the implications can be for the startup if the case goes against them.
Just before we continue, it is important to let you that the case was filed by BLOCKCHAIN (the owners of blockchain.info) against Paymium SAS (the company behind blockchain.io)
1. The Ugly Past
Perhaps, a lawsuit would never have been filed by Blockchain.info except for the fact that Paymium SAS has backed some failed crypto projects in the past.
In the filing, BLOCKCHAIN referred to Paymium, as a “French company with a concerning history of offering insecure digital products.” This may include the hacked InstaWallet product offered by the startup in the past.
BLOCKCHAIN claims it has filed the lawsuit in order to prevent consumers from mistakenly investing in an inferior product.
It is still unclear whether the established company is pointing out that the new product that blockchain.io is holding an ICO for, is “inferior.” Or is blockchain.info trying to stamp out a promising project simply to protect its name?
2. Similar Domain Name
As you may have noticed already, only two letters stand as the difference between the domain name used by both companies. This is one of the arguments presented by BLOCKCHAIN in the lawsuit since it is easy for a visitor to mistake one URL for the other.
Interestingly, the domain blockchain.io was registered in 2012, that is, just one year after blockchain.info began its operation.
In this case, any claims that Blockchain.io was trying to use the goodwill built by blockchain.info would not be true, since blockchain.info was just starting up at that point. On the other hand, it could be a case of blockchain.io realizing after a period of time that blockchain.info has now attained a popular status within the crypto community.
We cannot say for sure.
3. Similar Logo
A theft of intellectual property is being claimed by BLOCKCHAIN since the logo unveiled by Paymium for the new ICO project is not so different from what the former is using.
While the BLOCKCHAIN Design Mark is comprised of a two-dimensional square made up of smaller geometric shapes, the BLOCKCHAIN.IO Design Mark is comprised of a three-dimensional square made up of smaller geometric shapes.
Also, while the BLOCKCHAIN Design Mark is followed by the Blockchain name in dark blue, the BLOCKCHAIN.IO Design Mark is followed by the Blockchain name in a slightly different shade of dark blue.
Blockchain.io only launched it’s logo earlier this year.
4. Similar Websites And Similar Offerings
Unless proven otherwise, one cannot clearly say that blockchain.io is mimicking blockchain.info.
However, Paymium’s website (blockchain.io) features the same dominant color as BLOCKCHAIN’s – dark blue.
Even though the new ICO project is going to offer nearly the same products or services offered by BLOCKCHAIN, there’s little chance that their contents can mislead a first time user into believing that they are on the same website.
“Paymium’s digital currency services are identical or nearly identical to Blockchain’s Digital Wallet Services, Mobile App Services, and Website Services, which allow consumers to exchange one form of digital currency for another, such as Bitcoin for Ether or Bitcoin cash,” the lawsuit points out.
In fact, BLOCKCHAIN alleged in the lawsuit document that “consumers are already investing in Paymium’s ICO, assuming their investment is backed by or affiliated with Blockchain.”
5. Blockchain.info says Startup Claims That its ICO is Backed By The U.S SEC
Under section 7 of the lawsuit’s “nature of the action,” BLOCKCHAIN alleged that the crypto startup has written on its pitch deck for the ICO that the SEC backs their product. Well, it is clear that “registering an ICO with the SEC” is not possible given the hostile approach of the regulators toward crypto products.
But Blockchain.info has pointed to this as a shred of evidence that the startup may be trying to mislead the public through its ICO.
A closer look has revealed that it could be that Paymium was referring to a public document “Form D” which it filed in June 2018, announcing the company’s intent to sell tokens in the future.
Also, a line in the ICO whitepaper confirms that “the Tokens have not been and will not be registered under the U.S. Securities Act, or any other law or regulation governing the offering, sale or exchange of securities in the United States or any jurisdiction.”
Paymium Responds To Allegations
Few days after Blockchain.info sued Blockchain.io, Coinfomania received an official reply from the CEO of Paymium disputing the allegations from Blockchain.info.
According to the email statement, Paymium has been offering crypto exchange services since 2013 to over 170,000 customers, and have launched its private ICO to unveil blockchain.io.
“Paymium, successfully operating a BTC/EUR crypto-fiat exchange since 2013 and serving 170,000 customers, is currently closing its private ICO to accelerate the rollout of Blockchain.io,” Pierre Noizat CEO & co-founder of Paymium said in the statement.
Noizat claims all accusations from blockchain.info were false and misleading, and that blockchain.io is the legal property of Paymium. The CEO says they would do everything possible to protect their name, reputation, and loyal investors and customers, and that their lawyers will provide answers to the claims.
Not Halting ICO Launch
While anyone would expect that the startup would halt its ICO because of the court filing, Paymium has revealed that it has no plans of doing so. The ICO is now live at the time of updating this report.
“As for our ICO, we already provided early investors with the alpha version of our platform which is ready to be launched just after the public sale in November. The name blockchain.io is the legal property of Paymium, and the public sale will start as planned on September 27,” Noizat commented.
On its website, Blockchain.io claims to be “the European cryptocurrency exchange of trust for individual and institutional traders and investors.” The startup may likely have clear intentions with the new product that it is launching but may have just caught up nemesis of the past and the shadow of a bigger player in the industry.
It will be interesting to keep an eye out on how the Court case develops and whether Blockchain.io ICO turns out to be a success despite the controversy that it has to face right now.