In a Month Only, ICO Tezos Stung by Second Lawsuit
Nov 17, 2017 Posted / 5414 Views
The Tezos ICO (Initial Coin Offerings) which occurred in July, raised $232 million. Tezos follow a decentralized governance model and their goal is to build a decentralized applications platform to rival Ethereum. An independent Swiss foundation was created to handle the $232 million raised in the ICO, instead of Going to the company.
The head of the Swiss foundation, Johann Grevers was asked to resign from the board by the Breitman's, with both sides wanting an illegal power grab. Given a recent surge in the value of digital currencies, the $232 million has grown to $590 million in today’s prices.
Although Tezos promised to create “a new digital common wealth”, investors are still waiting for their decentralized wonderland. A group of the fed up investors has filed a class action lawsuit against the Breitman's on October 25.
It has been only less than a month and already a second lawsuit has been filed in a U.S District Court in Florida. The new complaint was filed by David Silver who is a partner at Silver Miller in south Florida. The Breitman's are alleged with the suit stating that they had sold unregistered securities in violation of federal law.
The complaint states that “Notwithstanding the defendant's’ attempts to avoid governmental and private scrutiny, it is clear that the financiers were indeed profit-seeking investors in a security and that the defendants promoted and conducted an unregistered offering of securities, not a charitable fundraiser.”
According to the complaint, the Breitman's and Dynamic Ledge Solutions which owns the Tezos foundation are cited as defendants. Another thing referred to the complaint is that many misrepresentations along with factual omissions and unlawful activities engaged by the defendants cannot and potentially will not see any return on their investments.
Although Tezos have got more than enough to cover the compensation and legal fees for both of their impending lawsuits, the investors will clearly not see any return on their investments. It can be noted that Tezos would have to become a multi-billion dollar corporation in order to return the $232 million along with a decent premium to the investors.
The investors are at a loss with all of the massive chaos that’s been going on. Investors have nothing to show for their investments. They are unable to exit their positions until the platform is launched again and tokens are allocated. The investors were told that the tokens, also known as Tezzies, bought by them do not hold any shares in the company.Any investor still in the hopes of getting a refund would be disappointed.
Bitcoin Suisse has revealed that they are responsible for countersigning every transaction that the Tezos foundation makes. The market for the tokens has been reportedly dropped by 75% the infighting broke. Kathleen Breitman said that the company still plans to release the Tezzies by February at a phone call with Fortune. Tezo’s accounts are currently being audited. A report will be sent to the foundation’s board in the following weeks to come. The With the Tezo’s ventures yet to get off the ground, investors are in anguish over their loss.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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