Freedman Normand Friedland LLP Files Securities Class Action Against Eqonex Limited (EQOS) and Certain Officers
NEW YORK, April 21, 2023 /PRNewswire/ -- Freedman Normand Friedland LLP ("FNF") announces that it has filed a class action lawsuit against Eqonex Limited ("Eqonex" or the "Company") (NASDAQ: EQOS), Binance Group ("Binance"), Bifinity UAB, certain Eqonex officers and directors, and Binance's Chief Executive Officer ("CEO") ("Defendants") asserting claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and/or §§ 5 and 12(a)(1) of the Securities Act of 1933. The action, filed in the United States District Court for the Southern District of New York and docketed under 23-cv-03346 is on behalf of a class consisting of all persons and entities that purchased or otherwise acquired Eqonex securities between March 7, 2022 and November 29, 2022, inclusive (the "Class Period") and/or unregistered EQO securities between April 8, 2021 and the present (the "Unregistered Securities Class Period") and were damaged by Defendants' violations of the federal securities laws.
If you are a shareholder who purchased Eqonex and/or unregistered EQO securities during the relevant class period, you have until June 19, 2023 to ask the Court to appoint you as Lead Plaintiff for the class. To discuss this action and/or obtain a copy of the Complaint, contact Ivy T. Ngo at [email protected] or 646-392-8842. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Eqonex (formerly Diginex Limited) was a Singapore-domiciled digital assets financial services company which operated four business lines: Custody, Asset Management, Brokerage, and the Eqonex Exchange (the "Exchange"). Notably, the Custody business was composed of Digivault, a stand-alone digital asset custodian based in the United Kingdom ("U.K.") which was the first one to be registered with U.K. Financial Conduct Authority ("FCA"), and the Exchange business facilitated the trading of products in BTC, ETH, BCH, USDC, USDT and EQONEX's alleged utility token known as EQO through a purportedly "compliant, secure, fair, and equitable platform."
On March 7, 2022, Eqonex announced a "strategic partnership" with Bifinity, a payments technology company affiliated with Binance and launched that same day, which initially focused on leveraging "Digivault as an FCA regulated custodian, strengthening the technology supporting the Eqonex Exchange, and expanding Bifinity's geographical footprint through Eqonex's licensing framework." In addition, the two companies announced that they "will continue to engage in non-binding discussions to explore potential merger opportunities, subject to regulatory approval[,]" and "explore opportunities to grow EQONEX's digital asset investment solutions business." Under the partnership, Bifinity issued Eqonex a $36 million convertible loan facility (the "Loan") in exchange for a right to appoint from within Bifinity, Eqonex's CEO, Chief Financial Officer and Chief Legal Officer, as well as two members for Eqonex's board.
The complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Defendants were not interested in leveraging the Exchange or deploying resources to strengthen that technology; (2) Eqonex had no way of paying Bifinity back pursuant to the Loan Agreement; (3) Bifinity and Binance had no intention of consummating a merger between Eqonex and Bifinity or Binance; and (4) as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
On August 15, 2022, Eqonex announced plans to exit the crypto exchange space, close the Exchange, and focus its resources on its Asset Management and Custody businesses. Despite the Exchange accounting for 79.9% of the Company's revenues in the financial year ending March 31, 2022, Defendants assured investors that day that "proactively exiting the crowded exchange space is the right decision to deliver shareholder value" and "[o]ur Asset Management and Custody business, Digivault, have already made solid progress with the additional resources that we have allocated to them recently, and we are bullish about their prospects as we become an organization focused on these high-potential business areas." That same day, in connection with the Exchange closing and in accordance with the Loan agreement, Bifinity granted Eqonex a waiver for the cessation of a major business and Eqonex agreed to increase its share charge of Digivault under the loan agreement from 24.9% to 100%.
On this news, Eqonex's share price fell over 18% to close at $0.637 on August 17, 2022.
Then, on November 21, 2022, Eqonex disclosed that it was "currently in breach of certain provisions of the Loan Agreement and consequently seeking a waiver from Bifinity on such breaches" and "[b]ased on the working capital forecast prepared by management of the [Company], the financial resources available to the [Company] as of March 31, 2022 and up to [November 21, 2022] may not be sufficient to satisfy the working capital requirements of the [Company] for a period of twelve months from th[at] date … which may cast significant doubt on the Group's ability to continue as a going concern."
On this news, Eqonex's share price plummeted over 48% to close at $0.141 on November 22, 2022.
Finally, before markets opened on November 29, 2022, Eqonex announced receipt of The Nasdaq Stock Market LLC ("NASDAQ")'s Listing Qualifications department's determination that the Company's securities will be delisted from NASDAQ and that trading in those securities will be suspended at the opening of business on November 30, 2022.
On this news, Eqonex's share price fell over 34% to close at $0.093 on November 29, 2022.
About Freedman Normand Friedland LLP
Founded in 2019, FNF is a national law firm comprised of innovative and tech savvy attorneys with stellar credentials. With experience from some of the most prestigious litigation firms in the country, FNF's legal team has a successful and decades-long track record of consistently achieving outstanding results in high-stakes and notable disputes on behalf of sophisticated clients. FNF's legal team has extensive experience litigating complex commercial securities, antitrust, class action and derivative matters on behalf of both plaintiffs and defendants in a broad range of industries. FNF couples a unique brand of creative thinking and technical expertise with well-balanced aggressive advocacy to achieve impressive results in complex, high value, and class action matters. As the firm continues to grow, it has focused on building a diverse attorney pool with cross-functional expertise.
CONTACT: Vel Freedman, [email protected].
SOURCE Freedman Normand Friedland LLP
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