Platinum-backed ICO token sale allegedly misses sales target and refuses to pay

Quick Take

  • Platinum Trading Institute of America, Inc. v. Platinum Investment Associated Limited
  • Allegedly, for the right to be PIA’s exclusive representative in the USA for seven years, PTIA paid 100,000 pound sterling to PIA
  • Parties agreed to that “[i]f the gross sales of [PIA] products in the Territory did not amount to a sum of $100,000.00 (US Dollars) during the first year of the Agreement, PIA was required under this [agreement] to pay PTIA 35,000 pounds sterling on May 31, 2018.”
  • The deadline came and went and PTIA alleges two things: 1) PIA refuses to turn over documentation to ascertain the sales in the USA related to PTIA’s efforts, and 2) refuses to pay the 35,000 pound sterling

Disclaimer: These summaries are provided for educational purposes only by Nelson Rosario and Stephen Palley. They are not legal advice. These are our opinions only, aren’t authorized by any past, present or future client or employer. Also we might change our minds. We contain multitudes.

As always, Rosario summaries are “NMR” and Palley summaries are “SDP".

[related id=1]Platinum Trading Institute of America, Inc. v. Platinum Investment Associated Limited, Case №1:19-cv-167 (S.D. Ohio March 4, 2019)[NMR]

When two parties want to do business together they may enter into a contract. That contract should clearly (as is feasible) lay out each party’s rights and obligations concerning the arrangement, as well as how disputes concerning the agreement will be adjudicated. This is good business, and a way to manage risk. This is true if you’re selling cheese to a supermarket or training people to sell platinum backed ICO tokens. One common area of disagreement is where compensation is based on sales volume. That’s what this case involves.

This case involves a UK based company, Platinum Investment Associates (“PIA”), and a US based company, Platinum Trading Institute of America (“PTIA”). PIA is engaged in the business of training people to trade cryptocurrencies as well as ICO tokens. Seeking entry into the U.S. market PIA entered into an agreement with PTIA on May 1, 2017, whereby PTIA would help sell PIA’s service offerings to U.S. residents.

Allegedly, for the right to be PIA’s exclusive U.S. representative for seven years, PTIA paid 100,000 pound sterling to PIA. In negotiating that agreement it appears that PTIA included a hedge for when sales were not robust. Specifically, the parties agreed to the following “[i]f the gross sales of [PIA] products in the Territory did not amount to a sum of $100,000.00 (US Dollars) during the first year of the Agreement, PIA was required under this [agreement] to pay PTI-A 35,000 pounds sterling on May 31, 2018.” Yes, but how do you prove whether sales exceed that amount? You provide documentation of course, and here is where dispute begins.

THE SCOOP

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