Tezos, which has raised $232 million via ICOs in July, is facing a class-action lawsuit for violating US securities law through the token sale. Will Tezos ICO class action lawsuit impact ICO market?
7 November, AtoZForex – A class-action lawsuit has been sued against Tezos. The lawsuit alleges that its organizers have violated US securities laws and defrauded participants in the online fundraiser, according to a report.
Organizers facing Tezos ICO class action lawsuit
In a related report, Tezos assured investors that they were making a donation and may never receive any tokens as a result of investing in the ICO. Tezos is the technology project which has raised $232 million via an initial coin offering in July.
People consider Tezos as the third generation of Blockchain after the wild success of Ethereum. The defendants include the co-founders of the project, Kathleen and Arthur Breitman. Additional defendants include the Tezos Foundation as well as its president Johann Gevers.
ICO clampdown prompts lawsuit
According to the report, an investigation by news agency prompted the clas action lawsuit. The report said that Gevers and the Breitmans are fighting over control of Tezos, which led significant delays to the venture.
The venture aims to create a computerized network for transactions running under blockchain technology such as bitcoin and other cryptocurrencies. The lawsuit is asking that plaintiffs receive the refund as well as damages.
Similarly, it contends that the company sold unregistered securities. Other law firms said they are looking into the ICO for potential lawsuits. Baker attorney Brian Klein, who is representing Breitmans, said that his clients are planning to “aggressively” combat the lawsuit.
Further, he added:
“This lawsuit is without merit for a host of reasons. Kathleen and Arthur Breitman, who are brilliant entrepreneurs and visionaries, are going to aggressively defend themselves.”
The investors who already invested in the Tezos are waiting to get back their funds. Therefore, the class action has been filed in California court by attorney James Taylor-Copeland on behalf of investors.
Ever since ICOs luring startups to make billions of dollars, regulators around the globe have been issuing the warning about the risks of ICO fundraising poses to investors.
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