Frequently Asked Questions

  1. What is this lawsuit about?

    This Litigation is a securities class action first filed on January 31, 2019 on behalf of all persons who purchased or acquired ELA Tokens in domestic transactions in the Elastos ICO, the Lock-In Program, or the secondary market between January 1, 2018 and July 27, 2023, and were damaged thereby.

    On May 26, 2020, the Court appointed Mark Owen and James Wandling as Lead Plaintiffs and Bleichmar, Fonti & Auld LLP as lead counsel. (ECF No. 52.)

    Lead Plaintiffs filed the operative Amended Complaint for Violations of the Federal Securities Laws (the “Complaint”) on July 29, 2020. (ECF No. 68.) The Complaint alleges violations of Sections 5 and 12(a)(1) of the Securities Act of 1933 (the “Securities Act”) by Defendants and Section 15 of the Securities Act by Rong Chen and Feng Han. Lead Plaintiffs alleged that Defendants offered and sold unregistered securities in the form of cryptocurrency tokens called ELA Tokens (“ELA Tokens”) in violation of the Securities Act. Lead Plaintiffs further allege that Defendants offered and sold the ELA Tokens via an Initial Coin Offering (or “ICO”) in January 2018, in which investors paid Defendants BTC or NEO in exchange for ELA Tokens; a so-called “Lock-In Program,” pursuant to which investors agreed not to sell their tokens for a pre-specified amount of time in exchange for accruing interest in the form of additional ELA Tokens; and secondary market digital asset exchanges.

    On December 9, 2021, the Court denied Defendants’ motion to dismiss the Complaint. (ECF No. 87.) Defendants filed their answers on January 13, 2022, which denied all claims alleged in the Complaint and asserted multiple defenses thereto. (ECF Nos. 94, 95, 96.)

    Lead Plaintiffs and Defendants then engaged in extensive discovery. Lead Plaintiffs requested documents from Defendants, Elastos’ attorneys, cryptocurrency exchanges, certain consultants, and other third parties, resulting in substantial document productions. The parties engaged in several discovery disputes and countless meet-and-confer conferences. They litigated before the Court a discovery dispute involving the withholding of discovery pursuant to the Personal Information Protection Law of the People's Republic of China (PIPL). Lead Plaintiffs deposed four current or former Elastos personnel and consultants, including Defendant Feng Han, at the time this Settlement was reached, and were preparing for two additional fact witness depositions, including of Defendant Rong Chen, and two 30(b)(6) depositions. Lead Plaintiffs also served extensive written discovery.

    The parties engaged in two Settlement conferences before mediator Robert A. Meyer. The first Settlement conference was held on September 7, 2022. Prior to that Settlement conference, the parties exchanged Settlement conference statements with exhibits. A second Settlement conference was held on April 28, 2023, but the parties were still unable to reach an agreement. Following numerous further teleconferences with Mediator Meyer over the following weeks, the parties accepted Mediator Meyer’s recommendation to settle the case, reaching a Settlement in principle on the terms set forth herein, subject to the approval of the Court.

    On August 23, 2023, the Court entered an order preliminarily approving the proposed Settlement, approving the Notice, setting deadlines, and scheduling the Settlement Hearing to consider whether to grant final approval of the Settlement.

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  2. Why is there a Settlement?

    Lead Plaintiffs made claims against Defendants on behalf of Class Members. Defendants deny that they have done anything wrong or violated any statute and admit no liability. No court has decided in favor of the Defendants or the Class. Instead, all parties agreed to the Settlement to avoid the costs and risks of further litigation, including trial and post-trial appeals, and Lead Plaintiffs agreed to the Settlement to ensure that Class Members will receive compensation. Lead Plaintiffs and Class Counsel all believe the Settlement is in the best interest of all Class Members in light of the real possibility that continued litigation could result in no recovery at all.

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  3. Am I included in the Settlement Class?

    For purposes of the Settlement, the Court directed that everyone who fits this description is a Class Member: All Persons who purchased or acquired ELA Tokens in domestic transactions in the Elastos ICO, the Lock-In Program, or the secondary market between January 1, 2018 and July 27, 2023, and were damaged thereby, except those Persons and entities that are excluded.

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  4. What can I receive under the Settlement?

    A Settlement has been reached in the Litigation between Lead Plaintiffs and Defendants, the terms and conditions of which are set forth in the Stipulation and the Exhibits thereto. The following description of the proposed Settlement is only a summary, and reference is made to the text of the Stipulation, on file with the Court or accessible here, for a full statement of its provisions.

    The Settlement Fund consists of Two Million Dollars ($2,000,000.00) in cash, plus any interest earned thereon.

    The Settlement Fund will be used to pay expenses for the Litigation, to pay for this Notice and the processing of claims submitted by Class Members, to pay Taxes and Tax Expenses, and to pay attorneys’ fees.

    The balance of the Settlement Fund (the “Net Settlement Fund”) will be distributed, in accordance with the Plan of Allocation described in the Notice, to Class Members who submit valid and timely Proofs of Claim.

    The effectiveness of the Settlement is subject to a number of conditions and reference to the Stipulation is made for further particulars regarding these conditions.

    Your share of the fund will depend on several things, including how many Class Members submit a timely and valid Proof of Claim, the total dollar amount of the claims represented by the valid Proofs of Claim that Class Members send in, the number of ELA Tokens you purchased or acquired, how much you paid for the tokens, when you purchased or acquired them, and if you sold your tokens and for how much.

    By following the instructions in the Plan of Allocation, you can calculate your claim. It is unlikely that you will get a payment for the full amount of your claim. After all Class Members have sent in their Proofs of Claim, the payment you get will be a part of the Net Settlement Fund equal to your claim divided by the total of all valid claimants’ claims. (See the Plan of Allocation in the Notice for more information on your claim.)

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  5. How do I get my Settlement award?

    You may submit a Proof of Claim as described below. If you choose this option, you will share in the proceeds of the proposed Settlement if your claim is timely, valid, and entitled to a distribution under the Plan of Allocation described in the Notice and if the proposed Settlement is finally approved by the Court; and you will be bound by the Judgment and release to be entered by the Court as described in the Notice.

    TO PARTICIPATE IN THE DISTRIBUTION OF THE NET Settlement FUND, YOU MUST TIMELY SUBMIT A PROOF OF CLAIM. A Proof of Claim may be submitted online here, or you may download a Proof of Claim form here. Read the instructions carefully, fill out the Proof of Claim, include all the documents the form asks for, sign it, and mail or submit it to the Claims Administrator so that it is postmarked or electronically submitted no later than December 6, 2023. The Claim Form may be submitted online here or emailed to the Claims Administrator at info@ElastosSecuritiesLitigation.com. Unless the Court orders otherwise, if you do not timely submit a valid Proof of Claim, you will be barred from receiving any payments from the Net Settlement Fund but will in all other respects be bound by the provisions of the Stipulation and the Judgment.

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  6. In return for these Settlement benefits, what am I giving up?

    If you do not make a valid and timely request in writing to be excluded from the Class (see FAQ 9), you will be bound by any and all determinations or judgments in the Litigation in connection with the Settlement entered into or approved by the Court, whether favorable or unfavorable to the Class, and you shall be deemed to have, and by operation of the Judgment shall have, fully released all of the Released Claims against the Released Defendants, whether or not you submit a valid Proof of Claim.

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  7. What is the difference between objecting to and excluding myself from the Settlement?

    Objecting is telling the Court that you do not like something about the proposed Settlement, the Plan of Allocation, or the attorneys’ fee and expense application. You can object only if you stay in the Class. Excluding yourself is telling the Court that you do not want to be part of the Class. Do not submit both an objection and a request for exclusion. If you submit an objection and a request for exclusion, your objection will be disregarded, and you will be excluded from the Class.

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  8. How do I tell the Court that I do not like the Settlement?

    Any Class Member who objects to any aspect of the Settlement, including the Plan of Allocation, or the application for attorneys’ fees and expenses, may appear and ask to be heard at the Settlement Hearing. The Court can only approve or deny the Settlement; the Court cannot change its terms. You can ask the Court to deny approval of the Settlement by filing an objection.

    You may object to the proposed Settlement in writing. You may also appear at the Settlement Hearing, either in person or through your own attorney. If you appear through your own attorney, you are responsible for any legal expenses charged by that attorney. Any objection must (1) include your name, email address, address, and telephone number; (2) clearly identify the case name and number (Owen et al. v. Elastos Foundation et al., Case No. 1:19-cv-5462-GHW); (3) demonstrate your membership in the Class, including the date(s), price(s), and number(s) of ELA Tokens of all your purchases, acquisitions, and/or sales of ELA Tokens; (4) contain a statement of the reasons for objection; and (5) be submitted to the Court either by mailing to the Clerk of the United States District Court Southern District of New York, 500 Pearl Street, New York, New York 10007, or by filing them in person at any location of the United States District Court for the Southern District of New York, or electronically by ECF on the docket for this case. Such objections, papers, and briefs must be received or filed, not simply postmarked, on or before December 1, 2023.

    Only Class Members who have submitted written notices of objection in the manner and time provided above will be heard at the Settlement Hearing unless the Court orders otherwise. Any Class Member who does not make their objection in the manner and time provided above shall be deemed to have waived such objection and shall be foreclosed from making any objection to the fairness or adequacy of the proposed Settlement, to the Plan of Allocation, or to the award of attorneys’ fees and expenses, unless otherwise ordered by the Court.

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  9. How do I exclude myself from this lawsuit?

    If you wish to be excluded from the Class, meaning to opt out of the lawsuit, you must submit a request for exclusion in accordance with the instructions below. If you choose to be excluded: (1) you will NOT be entitled to share in any recovery from the Net Settlement Fund; (2) you will NOT be bound by any judgment or release entered in this lawsuit; and (3) AT YOUR OWN EXPENSE, you MAY pursue any claims that you have by filing your own lawsuit or taking other action.

    If you are requesting exclusion because you want to bring your own lawsuit based on the matters alleged in the Litigation, you should consult an attorney and discuss whether it is too late to pursue your individual claim because it may be time-barred by the applicable statutes of limitations or repose.

    If you are excluded and pursue your own individual action you may also have to produce information and/or documents upon the Defendants’ request (a process known as “discovery”), which could include, but not be limited to, providing testimony under oath.

    If you wish to be excluded, you may submit a written request online here or you must mail a written request stating that you wish to be excluded from the Class to the Claims Administrator, Epiq Class Action & Claims Solutions, Inc., at the following address:

    Elastos Securities Litigation
    EXCLUSIONS
    Epiq Class Action & Claims Solutions, Inc.
    P.O. Box 2169
    Portland, OR 97208-2169

    The request for exclusion must: (1) include your name, email address, address, and telephone number; (2) state that you wish to be “excluded from the Class and do not wish to participate in the Settlement in Owen et al. v. Elastos Foundation et al., Case No. 1:19-cv-5462-GHW”; (3) state the date(s), price(s), and number(s) of ELA Tokens of all your purchases, acquisitions, and/or sales of ELA Tokens; and (4) be signed by you.

    YOUR EXCLUSION REQUEST MUST BE POSTMARKED NO LATER THAN DECEMBER 1, 2023.

    No request for exclusion will be considered valid unless all of the information described above is included in any such request. No further opportunity to request exclusion will be given in the Litigation. If you choose to be excluded from the Class, (a) you are not entitled to share in the proceeds of the Settlement described herein; (b) you are not bound by any judgment entered in the Litigation; and (c) you are not precluded by the Settlement from otherwise prosecuting an individual claim against Defendants, if timely, based on the matters complained of in the Litigation.

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  10. If I exclude myself, can I still get payment from the Settlement?

    No. If you exclude yourself, you may not send in a Proof of Claim to ask for any money.

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  11. Do I have a lawyer in this case?

    The Court appointed the law firm of Bleichmar Fonti & Auld LLP to represent the Settlement Class in this Litigation, including you (assuming you are a Class Member). These lawyers are called Settlement Class Counsel.

    You will not be charged for these lawyers. They will be paid from the Settlement Fund to the extent the Court approves their application for fees and expenses. If you want to be represented by your own lawyer, you may hire one at your own expense.

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  12. When will the Court decide whether to approve the Settlement?

    The Settlement Hearing will be held on December 22, 2023, at 3:00 p.m. ET, before the Honorable Gregory Woods, United States District Judge, at the United States District Court for the Southern District of New York, 500 Pearl Street, New York, New York 10007.

    The purpose of the Settlement Hearing will be to determine: (1) whether the proposed Settlement, as set forth in the Stipulation, consisting of Two Million Dollars ($2,000,000.00) in cash, should be approved as fair, reasonable, and adequate to the Class Members; (2) whether the proposed plan to distribute the Net Settlement Fund (the “Plan of Allocation”) is fair, reasonable, and adequate; (3) whether the applications for attorneys’ fees and expenses should be approved; and (4) whether the proposed Judgment should be entered.

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  13. May I speak at the Settlement Hearing?

    If you object to any aspect of the Settlement, you may ask the Court for permission to speak at the Settlement Hearing. To do so, you must include in your objection (see FAQ 8) a statement saying that it is your “Notice of Intention to Appear in Owen et al. v. Elastos Foundation et al., Case No. 1:19-cv-5462-GHW.” Persons who intend to object to any aspect of the Settlement and desire to present evidence at the Settlement Hearing must include in their written objections the identity of any witnesses they may call to testify and exhibits they intend to introduce into evidence at the Settlement Hearing. You cannot speak at the hearing if you exclude yourself.

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  14. Do I have to come to the Settlement Hearing?

    No. Settlement Class Counsel will answer questions the Court may have. But you are welcome to attend at your own expense. If you send an objection or statement in support of the Settlement, you are not required to go to Court to discuss it. As long as you mailed your objection on time, the Court will consider it. You may also pay your own lawyer to attend, but you are not required to do so. Class Members do not need to appear at the hearing or take any other action to indicate their approval.

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  15. Where can I find the conversion rates referenced in paragraph 11 of the Plan of Allocation?

    You can download a copy of the conversion table posted on the Documents tab of the Settlement Website located here. This table lists the applicable conversion rates for BTC, NEO, and USD during the Class Period.

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