Chinese e-commerce giant, Alibaba [BABA] this week filed a lawsuit with a US District Court against the developers of a new cryptocurrency for using its trademark name in their Alibabacoin token.
Alibaba sues ABBC Foundation in the middle of its Alibabacoin ICO
In the lawsuit, the Chinese-based company claimed that the defendants planned to use the trademark to raise funds in an Initial Coin Offering to generate over $3.5 million. Defendants to Alibaba’s suit include Alibabacoin (ABBC) Foundation, its founder Jason Daniel Paul Philip, cofounder Hasan Abbas and subsidiaries ABBC Block Chain IT Solutions LLC, and Alibabacoin General Trading FZE.
ABBC Foundation which is currently having a crowdsale of its ABBC coin was accused to have used Alibaba’s trademark “in order to deceive investors in the U.S. and around the world with a single-minded focus to capitalize on Plaintiff’s reputation for success.”
Information on ABBC Foundation’s website suggests that they are in the third stage of a six-stage ICO process which started on March 16, last month and should be concluded within the second quarter of 2018. It is unclear how much they have gotten so far and how the lawsuit will affect their ICO.
Our ICO Stage 2 Round 2 Sale worldwide ended successfully!
Round 3 start now! pic.twitter.com/QAaKK64ogX— ABBC Foundation (@abbcfoundation) March 30, 2018
Need for ICO endorsements
ICOs became very popular last year with a number of projects getting massive funds through the crowdfunding method. However, it takes a lot to pull off a successive ICO, not the least a strong marketing campaign. For this reason, ICO marketers devised several means to get traction; strategies involve bounty airdrops, celebrities, influencers and in the worst cases, can resort to sheer deception.
Alibaba claims ABBC Foundation knowingly used its trademark in public materials to mislead investors to think it is related to Alibaba.
The ABBC Foundation has not responded to the allegations though they released a statement earlier on Mar. 26 clarifying that Alibabacoin was no affiliated to Alibaba. It said the ICO is legally registered in Belarus. The district judge, Kimba Woods gave the defendants until April 11 to respond to the lawsuit. Alibaba is asking for an injunction against the defendant as well as damages.
Solomon Sunny is the market reporter for Smartereum, one of the global leaders in Ethereum, blockchain and currency news. He produces technical price updates on digital currencies and writes recent developments about blockchain.
