b'CASESParagon Coin, Inc.: Davy v. Paragon Coin, Inc. sellers of the PRG tokens in violation of Section 12(a)(1). et al., Case No. 18-cv-00671-JSW These motions were subsequently withdrawn without (N.D. Cal., Jan. 30, 2018) prejudice following the appointment of lead plaintiff in Paragon Coin, Inc. (Paragon) is a company focused onthe case. After the first amended complaint was filed incorporating blockchain technology into the cannabisin June 2018, defendants refiled the motion to compel industry. In August 2017 the company released aarbitration and motions to dismiss.White Paper describing its business model, whichIn November 2018, the SEC announced that it settled included the development of five different entitiesits charges against Paragon in connection with their within the company dedicated to various aspectsinitial coin offerings, which they noted were conducted of its business, in addition to details regarding itsafter the agency warned that such offerings would upcoming offering. Between August 2017 and Octoberbe subject to federal securities laws. The agency 2017, the company offered and sold digital tokens,imposed $250,000 in penalties and requirements to known as Paragon Coins (PRG Tokens) to be issuedcompensate harmed investors who purchased PRG on a blockchain as part of an offering. The companytokens. The company was also required to register their conducted the offering in order to raise capital assecurities pursuant to the Exchange Act as part of the part of their plan to pioneer the use of blockchainsettlement.technology in the cannabis industry. The company claimed that it raised $70 million in virtual currencies. Following several months of briefing on procedural and substantive issues, plaintiffs moved for leave to file a In January 2018, plaintiffs brought a class actionsecond amended complaint, which was granted, and against Paragon and its executives in connectionthe second amended complaint was filed on June 10, with their initial coin offering. They alleged that the2019. On January 17, 2020, the Court entered default PRG Tokens were unregistered securities, in violationas to defendants Paragon Coin and five individual of Sections 12(a)(1) and 15(a) of the Securities Act.plaintiffs for failure to respond to the second amended Defendants brought a motion to compel arbitration,complaint. On March 13, 2020, the Court entered or in the alternative, dismiss the action, arguingdefault as to two additional defendants on the same that the named plaintiff waived his right to bring thegrounds. The case is ongoing and plaintiffs will be action as a condition of his purchase of less thanmoving for class certification imminently. $12,000 worth of the PRG tokens, which contained an arbitration clause subject to the Federal ArbitrationCV Sciences, Inc.: Ina v. CV Sciences, Inc. et al, Act. They further argued that the complaint should beCase No. 18-CV-01602 (D. Nev., Aug, 24, 2018)dismissed because plaintiff failed to allege that PRGCV Sciences, Inc. (CV Sciences) is a life sciences was a security subject to the registration requirementscompany specializing in CBD research and the of the Securities Act. Additional motions to dismissdevelopment and sale of CBD products. The were filed as to specific defendants arguing thatcompanys pharmaceutical division, which focuses plaintiffs failed to show that certain defendants wereon the development of synthetically-formulated 6'