(Adobe Stock photo)
A Carmel-based investment firm is suing two cryptocurrency promoters and a defunct offshore entity, claiming it was misled into funding a project that unraveled within months.
Fifth Khagan LP filed the lawsuit in Hamilton Commercial Court against E-Magine Worldwide Inc., Josef Holm and Alejandro Garcia, alleging breach of contract, fraud and alter ego liability stemming from a $100,000 investment in a new crypto token called “$REWARD.”
The Lawyer left messages for Holm and Garcia on their individual LinkedIn accounts, but they did not immediately respond. The website for their company has been suspended and provides no contact information.
According to the complaint, Holm and Garcia, both based in Dubai, pitched the investment to Fifth Khagan principal John Sarson in late 2024. They marketed the $REWARD token as the currency for a new digital platform that would pay users for completing tasks—like bug testing—with cryptocurrency.
The pitch was formalized in a Nov. 13 SAFT, or Simple Agreement for Future Tokens. In exchange for $100,000, Fifth Khagan would receive over 8.3 million $REWARD tokens, with 10% immediately available for sale and the remainder vesting over six months. According to the lawsuit, Holm and Garcia claimed the venture had already raised $1.3 million of a $2 million target, enough to fund the platform for a year.
But when the token launched on Nov. 29, Fifth Khagan’s tokens remained locked. Company leaders later learned the smart contract governing the tokens had been coded to prevent their release. In a December Zoom meeting, Holm and Garcia allegedly admitted they changed the terms due to poor liquidity and had raised only $300,000, not $1.3 million, according to the lawsuit.
Weeks later, Holm announced the project was insolvent and laying off staff, according to the complaint.
Fifth Khagan alleges the defendants used E-Magine—a Seychelles-based entity not in good standing—to shield themselves from liability. The firm argues Holm and Garcia operated E-Magine as a shell company with no meaningful capitalization, and should be held personally liable for the breach and misrepresentations.
The firm is seeking compensatory and punitive damages, restitution, and attorney’s fees. It has requested a jury trial.
The case is Fifth Khagan, LP v. Alejandro Garcia, Josef Holm, E-Magine Worldwide, Inc., 29D02-2506-CE-006813.
The plaintiff’s attorneys are B.J. Brinkerhoff and Hannah Kaufman Joseph of Jeselskis Brinkerhoff and Joseph LLC.
