The lawsuit says Mr. Shihara was told by an employee that there were “controversial statements for [the Power Ledger] offer”.
The “revolution” of power
Power Ledger co-founder Jemma Green successfully sued The Australian Financial Review in 2021 for defamation over two articles reporting the sale of $34 million worth of tokens by Power Ledger in 2017. At the time, it was the largest sale, or initial coin offering, of its kind in Australia.
Ahead of the sale, Power Ledger said an electricity revolution would “take control out of the hands of central players” and put “ordinary citizens in the driver’s seat.”
Its blockchain technology was designed to allow consumers to exchange energy with each other.
If the system became popular, Power Ledger tokens, which traded under the symbol POWR, would likely rise in price. They sold for 24¢ on Tuesday and are down 60% over the past five years, according to Morningstar.
Power Ledger did not respond to an emailed request for comment.
The company is not the only cryptocurrency issuer named in the 56-page lawsuit, which alleges that Bittrex asked crypto companies to remove public information that made their tokens look like investments, including references to shares, earnings and dividends. Other tokens cited include OMG, DASH, ALGO, TKN, NGC, and IHT.
US stock exchanges and brokers are subject to strict regulation. Crypto exchanges are lightly regulated and do not have to take special precautions to protect investors’ assets, such as holding them in segregated accounts.
In a private conversation cited by the SEC, a Bittrex employee complained that customers were upset that they were not informed about the removal of their cryptocurrencies from the trading platform.
“I hate people bitching because we don’t email them about market moves…I LOST A LOT BECAUSE I DIDNT KNOW,” the person wrote.
One of the company’s three founders replied that investors should “fuck off.”
The bankruptcy does not affect Bittrex’s non-US business, Bittrex Global, which was still available in Australia on Tuesday, and is also being sued by the SEC.
Bittrex Global chief executive Oliver Linch said the company had no US customers and complained that the SEC had not contacted it before filing the lawsuit on April 17.
“Bittrex Global is always ready to work productively with regulators,” he said. “But we’re disappointed to say the SEC doesn’t seem interested in having constructive conversations.”