The Tezos Foundation, the group behind the troubled initial offering of $ 233 million in Tezos tokens in 2017, agreed to settle a $ 25 million investment lawsuit filed by investors.
The lawsuit alleged that the Tezos ICO violated US securities laws by offering unregistered security. Although prosecutions are usually filed by the US Securities and Exchange Commission, the SEC, at least to date, has never taken legal action against the Tezos Foundation.
A class action lawsuit filed in 2017 alleged that, in addition to violating US securities laws, defendants fraudulently and fraudulently advertise the sale of tokens as equity investments, when they are instead filed as charitable contributions, allowing defendants to pocket "tens of millions of dollars" for yourself.
Under the terms of the settlement, which must still be approved by the states of California and the federal courts, the Tezos Foundation pleads not guilty.
“The Tezos Foundation has decided to settle all claims because the Tezos Foundation believes it is in the best interests of the Tezos project and the community at large,” the Tezos Foundation said in a statement on Friday. “The Foundation continues to believe the lawsuits were futile and continues to deny any wrongdoing. However, litigation is costly and time-consuming, and it has been decided that the one-time financial cost of settlement is preferable to the distractions and legal costs of continuing to fight in the courts."
Tezos ICO has been troubled from the start. In October 2017, it became known that Tezos was falling apart, as the founders of the code behind the token declared war on the Tezos Foundation, created to manage it. The scandal involved Arthur and Kathleen Breitman of Dynamic Ledger Solutions Inc., the company that developed the Tezos code, and Johann Gevers, then president of the Swiss Tezos Foundation.
Gevers, along with Diego Olivier Fernandez Pons, left the Tezos Foundation in February 2018 to bring Tezos back on track.
Despite his troubles, Tezos found a ready audience. According to Coinmarketcap, Tezos is the 10th most popular cryptocurrency by market cap with a total value of $ 116 million, which is roughly half of its ICO price.