Fund a Case
A New Asset Class
JPB Liberty has created a new asset class, enabled by Web 3.0 technology:
direct investment in individual high value class actions
via a publicly tradable, liquid crypto token
providing a share in the proceeds of successful claims
with payout in A$, US$ or cryptocurrency at successful case conclusion.
Traditional litigation funding only allows investment on a portfolio basis with conservative case selection via private equity or the few publicly listed litigation funders.
A Publicly Tradable Token
The "Sue Facebook" Token (SUFB) is currently listed on the Steem Engine decentralised exchange, with other exchanges to come. This will provide investors the ability to trade in and out of the token during the years it may take to bring the case to conclusion.
Compliant with Australian Law
JPB Liberty is an Australian company conducting litigation funding for litigation to be pursued in Australia (for worldwide claims) against entities over which Australian Courts have jurisdiction.
Litigation funding schemes are specifically exempt from Australian securities regulation. The token sale and listing are part of a litigation funding scheme which falls within this exemption.
US investors who are not eligible class members in a particular class action will be excluded from the token sale and tokens will not be listed on US based centralised exchanges.
How it Works
The first token for the Crypto Ad Ban Case is the "Sue Facebook" Token (SUFB). It is a Steem Engine token on the Steem blockchain.
These tokens will collectively have the right to 20% - 30% (depending on the case) of the total damages pool of all class members who have signed the Funding Agreement with JPB Liberty. The precise entitlement of each token will depend on the total number of tokens issued (fixed for each case) and the percentage of damages allocated to token holders in the Funding Agreement.
Investors will purchase these tokens from JPB Liberty with cryptocurrencies such as Bitcoin & Ethereum and will receive tokens which sit in their Steem wallet. These cryptocurrency funds will be used by JPB Liberty to fund the running of the class action. JPB Liberty will generally retain a percentage of the tokens itself and the total amount raised will be capped to the needs of the case (generally less than $10 million).
During the case, investors may trade their tokens on crypto exchanges where they are listed. It is expected that the market value of each token will reflect the market's assessment of the likely payout on the token at the conclusion of the litigation. JPB Liberty will provide updates for class members and token holders on significant developments as the litigation proceeds.
On successful conclusion of the case (Court ordered damages or settlement) investors will be paid out their share of the damages pool according to their token holdings and paid out tokens will be destroyed. The form of payment will likely be A$ or US$, but an investor may request payment in cryptocurrency. Exact details will depend on the terms of settlement and Court orders at the conclusion of the case.
On unsuccessful conclusion of the case (final adverse Court decision or discontinuance of proceedings) any remaining funds from the token sale after payment of all costs, including the other side's costs, will be returned to token holders on pro rata basis in proportion to their holding.
High Risk, High Return
This is a high risk, high return investment. There is a risk of total loss of investment.
However JBP Liberty intends to pursue class actions where the total damages claim of all class members exceeds A$100 million. Some cases will have damages claims far exceeding this.
While there are many uncertainties and risks, the basic proposition is this:
Cost of Class Action = Size of Token Sale = A$1 - $10 million
Total potential damages claim in Class Action: A$100 million - $300 billion
Percentage of above payable to token holders on success: dependent on terms of Funding Agreement and the total claim value of class members who have signed Funding Agreement
Thus the ratio between investment and potential return is high to very high.