Investors piled their crypto assets into the Tezos ICO in the summer
Reuters
A second class-action lawsuit has been lodged in the United States against the founders of the tokenised blockchain project Tezos, and the Swiss-based foundation that houses hundreds of millions of dollars of investors’ money.
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The law firm Silver Miller Law presented its complaintExternal link in Florida this week, following a California lawsuit issued last month. Other US law firms are also threatening to sue Tezos founders Arthur and Kathleen Breitman, and the Tezos Foundation, which is headed by president Johann Gevers.
Gevers and the Breitmans are embroiled in a public dispute over governance at the Tezos Foundation, each accusing the other of malpractice. Gevers is accused of “self-dealing” regarding a bonus (a charge he denies) while he has returned fire with the allegation of an attempted illegal coup to oust him as president.
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Tezos Foundation faces legal onslaught
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Here is what one lawyer has to say… .
The bitter row has set the project back months and plummeted the price of Tezos token (Tezzies) futures on derivatives markets. The new lawsuit claims that investors were misinformed about the terms of the Tezos initial coin offering (ICO) in the summer that raised $232 million (CHF229 million) in a matter of days. The value of that pot has now swelled to around $600 million (according to the lawsuit) as the price of cryptocurrencies rocketed in the last months.
Furthermore, the Florida lawsuit claims that the ICO, including the establishment of the Tezos Foundation in Switzerland, was “designed with specific intent of evading US federal and state securities laws; and in doing so, to prevent Plaintiff and the Class of the ability to enforce [their] rights in US courts”.
Silver Miller argues that the Florida courts do have jurisdiction in the case, claiming that the ICO violated securities laws.
Audit
The dispute between Gevers and the Breitmans in expected to reach a critical stage in the coming weeks. An external audit of the foundation’s books is due to be presented to the foundation board. Their deliberations will be being closely watched by the Swiss Foundation Supervisory Authority and the Swiss financial regulator.
On Tuesday, the cryptocurrency financial services provider Bitcoin Suisse moved to calm investor fears by revealing it can block any payments being made by the Tezos Foundation.
In its statementExternal link, Bitcoin Suisse says it is “currently not aware of any evidence that Contributor funds have been mismanaged, lost or put at risk by the Tezos Foundation or any party involved in the project”. But the statement also added that investors are not entitled to a refund.
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‘Your money is safe,’ Tezos broker tells investors
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At the same time, investors cannot expect to receive any refunds, Bitcoin SuisseExternal link CEO Niklas Nikolajsen wrote in a statementExternal link on Tuesday. The Zug-based Tezos FoundationExternal link sits on top of a stockpile of cryptocurrencies now worth some $500 million (CHF496 million). It is supposed to spend this hoard developing the blockchain-based smart…
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A week ago, the founders of Tezos, Arthur and Kathleen Breitman, accused the foundation’s president, Johann Gevers, of “an attempt at self-dealing, misrepresenting to the council the value of a bonus he attempted to grant himself.” Gevers has rejected the allegations as lies and a smear campaign. Gevers was threatened with suspension, with the Breitmans calling…
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The public fall-out between the Tezos project’s founders, Arthur and Kathleen Breitman, and Johann Gevers, the president of the foundation created to spend the vast sums raised from the public in the summer, will make some already wary people even more nervous. On Wednesday, the Breitmans published a damning attack on a perceived lack of activity…
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