ASX-Listed DigitalX Hit With Legal Action Over ICO Involvement

Shares in the ASX-listed blockchain firm DigitalX slumped Friday after it revealed it is facing a legal claim from investors in an ICO it advised.

AccessTimeIconSep 28, 2018 at 11:31 a.m. UTC
Updated Sep 13, 2021 at 8:25 a.m. UTC
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Shares in the publicly listed blockchain tech and consultancy firm DigitalX have slumped after it revealed it is facing a legal claim in an Australian court.

In an announcement to the Australian Securities Exchange (ASX) Friday, the firm says it has been served with an Originating Application and Statement of Claim in Australia's Federal Court, which has been brought by a group of investors in an initial coin offering (ICO) to which it was an advisor.

The parties are claiming roughly US$1,833,077 plus damages, the company indicates.

DigitalX says it is currently reviewing the claim with its legal team, but it "denies any claim of wrongdoing and, for reasons that will become apparent as this matter progresses, believes that it has strong grounds to defend any claims bought forward by these applicants."

DigitalX states:

"As such, the Company intends to vigorously defend this matter and protect the reputation of the Company."

As the news broke, shares in the Perth, Australia, and New York-based firm had dropped from a daily high of AUS$0.092 to AUS$0.08, at press time.

The company, which provides ICO and blockchain consulting services and blockchain software development, started off as a bitcoin mining business called DigitalBTC and was one of the first publicly listed bitcoin companies, launching for trading on the ASX back in 2015.

It abandoned mining the same year, amid a price slump at the time, and rebranded as DigitalX a month later as it shifted focus to consumer products including a payments app.

Today's news is not the first time the company has faced legal trouble and, in July 2016, its co-founder, Zhenya Tsvetnenko, resigned after he was indicted by the U.S. government for his alleged involvement in a fraudulent text messaging scheme.

ASX image via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.