Initial Litigation Offerings to Bring $10B Asset Class to Avalanche Blockchain, Retail Investors for the First time
First “ILO” seeks to raise from retail investors to support Apothio LLC v. Kern County, State of California in the unlawful destruction of 500 acres of hemp crops worth approximately $1B.
NEW YORK – December 14, 2020 — Ava Labs, Roche Cyrulnik Freedman LLP, and Republic Advisory Services are bringing the $10B asset class of litigation financing to the Avalanche blockchain through the creation of a first of its kind token, the Initial Litigation Offering (“ILO”), a blockchain-enabled litigation financing product open to all investors.
Litigation funding, also known as legal financing and third-party litigation funding, provides individuals who otherwise lack the necessary resources the funds needed to litigate or arbitrate a civil claim. ILOs raise the funding required to pursue litigation in these cases and tokenize an economic right in such claims. Each token indirectly represents a legal claim to a portion of the potential financial recovery which has been converted to a digital asset.
Since these arrangements are secured only against the outcome of the litigation, the funders bear the risk in the event the claims are unsuccessful. However, if the litigation does return a recovery, the funders share in the financial upside. One the leading litigation fund, LexShares, has invested in 103 cases since 2014. Of those, 43 have been resolved, with a 70% win rate, and median annualized returns after fees and expenses of 52% (CNBC), beating out many hedge funds and far exceeding the 8.7% annualized return of the S&P 500 over the same time period.
“ILOs are a breakthrough for both individuals lacking the resources to seek remediation, and for retail investors who are often locked out of the most highly-performant asset classes,” says Kevin Sekniqi of Ava Labs. “They are fundamentally unique from any other investments, and the creation of the ILO marks the first time blockchain technology will be used to democratize financial products at a multi billion-dollar scale..”
The first of many contemplated ILOs arises from one of the largest wholesale destructions of personal property by government entities in the history of the United States. The plaintiff in that matter, Apothio LLC, is a California-based industrial hemp research, development, and commercialization institution focused on hemp-derived cannabidiol oil (CBD). In late October 2019, without providing any notice or opportunity to be heard, Kern County Sheriff’s Office (“KSCO”) deliberately and wrongfully destroyed 500 acres of the plaintiff’s legally grown hemp farm, estimated to be worth at least $1 billion. The ILO, which is expected to take place in Q1 2021 will provide investors the ability to participate in the upside of a potential recovery.
Apothio LLC is represented by Roche Cyrulnik Freedman LLP, a prominent, NYC-based law firm with deep experience handling cryptocurrency and cannabis matters. It will be the first time a civil action is partially financed in a tokenized offering.
“The rise of litigation funding in the United States has provided individuals and smaller organizations access to the resources necessary to assert their legal rights against well-funded entities,” says Kyle Roche of Roche Cyrulnik Freedman LLP. “The advent of the ILO has the potential to provide even greater access to justice in our society and I’m excited that our firm will be leading the charge along with the innovative minds at Ava Labs and Republic.”
Avalanche and Republic Advisory Services are working on the regulatory processes to enable primary issuance and secondary trading of the litigation offering tokens minted on the Avalanche blockchain.
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About Ava Labs
Ava Labs makes it simple to launch finance applications using blockchain technology–with highly scalable and efficient networks, customizable public and private blockchains, the capability to create any digital asset, and more. We are empowering people to build an open, simple, and democratic internet of finance.
Ava Labs was founded by Cornell computer scientists who brought on talent from Wall Street to execute their vision. The company has received funding from leading investors like Andreessen Horowitz, Initialized Capital, Galaxy Digital, Bitmain, and Polychain Capital, with angel investments from Balaji Srinivasan and Naval Ravikant. www.avalabs.org
About Roche Cyrulnik Freedman LLP
Founded in 2020, Roche Cyrulnik Freedman LLP 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, RCF’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. RCF’s legal team has extensive experience litigating complex commercial, securities, antitrust, cryptocurrency, and cannabis matters on behalf of both plaintiffs and defendants. Recently lauded as an “elite litigation boutique” by the New York Law Journal, RCF 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.
About Republic
Republic Advisory Services is the blockchain consulting division of Republic, a US-based multi-asset private investing platform with nearly 1M members from over 100 countries. Republic Advisory Services is a market leader in blockchain and tokenization advisory services.. Founded in 2016, Republic is backed by AngelList, Binance, Passport Capital, FBG, and other noted investment firms. For additional information, visit republic.co and @joinrepublic on Facebook, Instagram and Twitter.
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