Tezos ICO Promoters Hit with Second Class Action Lawsuit

The organisers of the Tezos ICO have been hit with another lawsuit for its controversial fundraising with a token sale.

As per the allegations, $232 million was raised to issue a new cryptocurrency by deceiving investors. Moreover, there was no clear end date to fund the development of the transaction system.

Coral Springs-based law firm Silver Miller filed the class action lawsuit in a US District Court in Florida. According to the court documents, the allegations against Tezos’ organizers are that they broke US securities laws and defrauded and misled participants in the online fundraiser.

The defendants are Arthur and Kathleen Breitman, the co-founders of the project; their Delaware-based company Dynamic Ledger Solutions, which owns the rights to the transaction system’s code; and the Tezos Foundation, a Swiss entity that was set up to carry out the fundraiser.

The complaint which was made public on Wednesday reads: “Notwithstanding the defendants' attempts to avoid governmental and private scrutiny, it is clear that the financiers were indeed profit-seeking investors in a security and that Defendants promoted and conducted an unregistered offering of securities, not a charitable fundraiser.”

“[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,” it continues.

Breitman's attorney Brian Klein and Tezos Foundation’s president Johann Gevers are yet to give any statement on this new lawsuit.

On 25th October, another class action lawsuit was filed against this project's promoters in California. The lawsuit from San Diego-based firm Taylor-Copeland Law came days after the dispute between the Breitmans and Johann Gevers surfaced to the public.

In July this year, Tezos had a successful token sale, which was also one of the biggest seen so far. The sale of the token, 'Tezzies', raised $232 million.