Tezos is in hot water yet again. For the second time in just 3 weeks, the founders of Tezos are being sued in a class action lawsuit. The allegations include the selling of unregistered securities and fraud. This comes in the wake of their July ICO which raised over $232 million. This is just the latest development in a saga that began when the founders, Arthur and Kathleen Breitman, accused the head of the Tezos Foundation of skimming some of the money. The head of the Tezos Foundation, Johann Gevers, was initially brought on to help support the project’s launch. Gevers followed that accusation with one of his own, saying that the Breimans were attempting to seize control of the non-profit foundation illegally. The initial lawsuit ensued within days and the most recent was filed with a Florida judge this week.
The lawsuit complaints name the husband and wife owners along with the companies that hold Tezos’ intellectual property including the Tezos Foundation, as the defendants. The arguments are based on the deceptive marketing strategies used to push the sale of “Tezzies”, the platforms tokens. Investors were being told these investments would go towards charitable contributions but instead tens of millions of dollars were kept by the parent organizations.
[D]ue to the many misrepresentations, factual omissions and unlawful activities engaged in by the defendants – it appears [participants in the ICO] cannot, and potentially will not, see any return on their investments.
Issues like this are causing the distrust with ICO’s and have been textbook examples on why countries have outlawed them. It is unfortunate that people take advantage of investors who are just looking to invest in growing businesses and charities. As the ICO landscape continues to evolve, hopefully instances like this become a thing of the past.
