BTC $43981.67 (3.32%)
ETH $3136.59 (8.23%)
USDT $1.00 (0.00%)
BCH $511.09 (0.15%)
BSV $131.83 (0.24%)
LTC $152.94 (2.66%)
BNB $351.46 (1.47%)
ADA $2.24 (-0.9%)
DOGE $0.20 (0.13%)
BTC $43981.67 (3.32%)
ETH $3136.59 (8.23%)
USDT $1.00 (0.00%)
BCH $511.09 (0.15%)
BSV $131.83 (0.24%)
LTC $152.94 (2.66%)
BNB $351.46 (1.47%)
ADA $2.24 (-0.9%)
DOGE $0.20 (0.13%)

Tezos Ends 3-Year ICO Lawsuit With $25M Settlement

Tezos Ends 3-Year ICO Lawsuit With $25M Settlement

Tezos Foundation and its founders Arthur and Kathleen Breitman have agreed to pay $25 million for settlement damages to investors over its initial coin offering (ICO) in 2017, raising over $230 million.

As per the court ruling, Trigon Trading, which is the leading plaintiff, and other crucial figures will receive a settlement of $5,000 to $7,500 each, while the plaintiff’s lawyers will receive over $8 million in legal fees.

The remaining $16.5 million will be distributed to Tezos investors who participated in the token sale and experienced some losses. However, it was agreed that no settlement will be given to any holders who profited from the sale in the months after.

But even though the Tezos Foundation chose to settle all claims, saying in the announcement that the settlement is “in the best interest of the Tezos project and community as a whole.”

The announcement added,

The Foundation continues to believe the lawsuits were meritless and continues to deny any wrongdoing. However, lawsuits are expensive and time-consuming, and it was decided that the one-time financial cost of a settlement was preferable to the distractions and legal costs associated with continuing to fight in the courts.

In July 2017, the Tezos Foundation conducted an ICO that raised over $230 million for its native XTZ asset and Tezos, a platform that supported the creation of decentralized applications, much similar to Ethereum.

This ICO was considered the biggest crypto crowdfunding initiative at that time, and was later alleged to be an unregistered security offering. Initially, they were called “charitable contributions”.

The allegations were then brought against Tezos Foundation in late 2017, months after the historic ICO.

According to the US Federal Securities Law, no company is permitted to sell or issue security tokens which derive their value from a real-world asset and are tradable without registration in the Securities and Exchange Commission. Such assets needed to qualify the Howey Test, which XTZ did not.

Despite the settlement ordered by the court, there is no ruling on whether XTZ is indeed a security or not.

A devoted news specialist who is passionate about the blockchain and crypto industry. She writes news and feature articles based on the latest developments in the market. She is always updated and on the go.