One of the newest coins, Internet Computer Protocol (ICP), is the latest in the crypto market to be dragged into a legal tussle. On Thursday, Roche Freedman LLP filed a class action lawsuit on behalf of ICP investors against Dfinity – the company behind the cryptocurrency, on allegations that it indulged in insider trading, securities fraud and more issues.
The lawsuit filed in California alleges that shortly after issuing ICP tokens to itself and insiders, Dfinity and other stakeholders indulged in massive sell-offs of the cryptocurrency into the open market, driving a crash in its price from an ATH of over $730 to less than one-tenth of its value by early August. Their actions of dumping significant quantities of Internet Computer coins into the market earned them several billions of dollars in profit but caused significant losses to individual investors who believed in the coin’s potential.
Although the Dfinity Foundation is a non-profit organization with its headquarters in Switzerland, Dfinity USA Research LLC is based in Delaware and headquartered in Palo Alto, California, making it subject to regulation by the SEC. Given the SEC’s current hostile mood towards digital assets, this does not bode well for the company behind the ICP coin at the moment.
The Internet Computer coin was making the most of the latest bullish mood towards cryptocurrencies in general, surging to over $75 earlier this week. However, it has since eased lower, falling below the $70 mark and experiencing muted action since the lawsuit was filed. At the time of writing, ICP/USD is trading at around $65.77.
Key Levels to Watch
Technical analysis of the 4-hour chart of ICP/USD paints a mixed picture for the near-term outlook. Most of the moving averages and the momentum indicator are suggesting a bullish bias, although some MAs as well as the MACD reveal a bearish bias among investors at the moment as well.
Internet Computer coin’s price is holding well above the pivot point at $53.02 for now but is trading under the immediate resistance level at $68.44. Increased buying pressure can take ICP’s rate above this level, allowing it to return above the $70 mark.
If the bullish momentum strengthens further, we can see buyers test resistance again at $81.59 before taking its price above the all important $100 level.