Hemp grower Apothio has raised $ 330,000 for a lawsuit against Kern County, Calif., Through what is known as an initial litigation offer on the Republic investment platform.
Investments are accepted in USD, but proof of investment is issued in the form of digital tokens on the Avalanche blockchain network (AVAX). This is the first Initial Litigation Offer (ILO) on the Republic platform launched in 2016 and designed for equity crowdfunding.
The hemp grower is seeking compensation from the county for damage suffered when lawmakers and the California Department of Fisheries and Wildlife bulldozed 450 acres of crops worth up to $ 1 billion.
Apothio’s attorney, Kyle Roche, told Cointelegraph that crowdfunding legal affairs through cryptocurrency investments has many benefits:
“The legal systems work very well, they are just expensive. If you can remove the cost-based barriers by allowing capital to enter the system where it is needed, I believe that ILOs can be a positive force for access to justice.
Investing in Litigation Funding is where third party investors unrelated to a case can provide funds to a litigant in a court case and earn a return on investment based on the outcome of the case. . Under an ILO, fund contributors receive digital tokens which entitle them to a portion of the damages recovered as a result of the decision in the case.
The global litigation finance investment market was valued at $ 11.4 billion in 2019 and is expected to more than double to $ 24 billion by 2028, according to a Dec. 7, 2021 report from Research Nester.
Roche noted that although the market is growing, it is mainly reserved for private institutions. He hopes that as more cases use OITs, the high barrier to entry into legal investments will be lowered by crypto:
“Using cryptography is not a challenge, but we need to make sure the regulatory tools work for what the ILO does. “
The hemp grower’s case has more than surpassed the minimum target of $ 250,000 for the litigation to proceed. ILO tokens will be frozen in investors’ wallets for 90 days, after which they will be transferable.
After a verdict in a case is reached, token holders will receive any feedback they may have and the tokens will be frozen again. As a deal progresses after the tokens are unlocked, a speculative market for tokens might open up, as investors might want to get rid of or buy a larger stake in the outcome of a deal.
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In 2021, Roche’s law firm began making plans to launch its own tokenized OIT marketplace called Ryval, which is currently under development on Avalanche. Roche hopes that the concept of the ILO will start to gain ground both in the United States and around the world thanks to Ryval.
The ILO concept also introduces another way for cryptocurrency to adopt real-world applications through tokenization. Investing in litigation finance would join modern art via non-figible tokens (NFTs), social media interactions, real estate investing, and even the oil and gas industry as sectors where tokenization is becoming a focus. reality.