The Supreme Court of Gibraltar has lifted a two-month freeze on 542 million PLAY tokens worth approximately $2.6 million, dealing a blow to a U.S. gaming company in its ongoing legal battle with its Gibraltar-based subsidiary over control of the digital assets.
What to Know:
- The court reversed its February decision to freeze tokens representing nearly two-thirds of PLAY's circulating supply
- Judge cited insufficient evidence and concerns about damage to token value as reasons for lifting the freeze
- The token's price has declined by over 97% since its December launch, now trading for fractions of a cent
In a new ruling, Gibraltar Supreme Court Judge John Restano reversed his earlier decision to freeze the tokens, citing concerns that the legal proceedings were contributing to their declining value and noting that evidence presented by U.S.-based Ready Makers was inadequate to justify continuing the freeze.
"Whilst there may be many reasons for the drop in value of the tokens, the evidence before the court suggests that these proceedings are a factor in that regard," Restano wrote in his judgment.
The legal dispute pits U.S.-based Ready Makers, operating as Ready Games, and its founder David Bennahum against Ready Maker (Gibraltar) Limited and its CEO Christina Macedon. Ready Games alleges that Macedon improperly took control of the Gibraltar subsidiary and its PLAY token, which functions as a reward on the PLAY Network platform.
Ready Games initially secured the freeze in February, which resulted in the tokens being transferred to a court-appointed custodian. The 542 million tokens represent approximately two-thirds of PLAY's circulating supply and are currently valued at around $2.6 million.
Token Value Plummets Amid Legal Wrangling
The token's value has plummeted dramatically since its December launch, losing over 97% of its value according to data from cryptocurrency tracking site CoinGecko. PLAY currently trades for fractions of a cent, continuing a three-month downward trend that has coincided with the legal battle.
In his ruling, Judge Restano was highly critical of the evidence presented by Ready Games, stating it was "far from impressive, and raises more questions than it answers." He also cited the company's failure to disclose that it was in administrative dissolution at the time of filing for the token freeze, which he characterized as "a significant omission."
"I do not consider that this is a case where the order should be re-granted in any event," the judge wrote, effectively ending the court-mandated freeze of the digital assets.
Bennahum told Cointelegraph that his company has already filed an appeal along with "an urgent application with the Gibraltar Court of Appeal asking them to either stay the discharge of the original injunction or grant a new injunction" to refreeze the tokens pending the outcome of the appeal.
Disputed Ownership Claims
The Ready Games founder expressed strong disagreement with the court's decision, characterizing the Gibraltar-based firm as being in an "alarming state." Bennahum maintains that his U.S. company created the Gibraltar entity with Ready Games' intellectual property and funding "specifically to serve as our token launch vehicle."
"We maintain that Ms. Macedo and associated parties have wrongfully seized control of this entity and its assets," Bennahum said.
Judge Restano acknowledged in his judgment that Macedon disputes Bennahum's claims. The judge also noted that regulatory filings purportedly show Macedon as the sole controller and ultimate beneficial owner of the Gibraltar-based company.
In a February statement, Ready Games said its court action was intended to "recover control" of the Gibraltar company. The statement added that a Delaware business court had issued a temporary restraining order requiring the Gibraltar entity to restore Ready Games' access to the firm's technical infrastructure, including "GitHub repositories, cloud systems, and domain accounts."
Closing Thoughts
This case highlights the complex legal challenges emerging in the cryptocurrency and Web3 gaming sectors, particularly regarding ownership and control of digital assets. As the appeal process unfolds, both the fate of the 542 million PLAY tokens and the governance of the PLAY Network platform remain uncertain.