The ongoing class-action lawsuit against the popular cryptocurrency Tezos, suggests the outcome might be the same as with other ICOs that had been charged with violating the US securities law. Same as the Opporty ICO, the complaint alleges that the Tezos Foundation had illegally raised approximately $232 million worth of Ether during an unregistered security offering.
Tezos Foundation denies allegations
Filed by Block & Leviton in November 2017, the lawsuit is accusing the Tezos Foundation of wrongdoing with regards to the initial coin offering. The Foundation denies the allegation, even though it had already agreed for a $25 million settlement. On April 30th, Richard Seeborb, a US District Judge granted preliminary approval for the settlement, according to Cointelegraph, mentioning “the court will be able to approve it, subject to further considering at the Settlement Hearing.”
Based on the available information, the settlement will not name the Tezos ICO as a securities offering, since that could cost up to $150 million in fines. The news is disturbing, considering Tezos was one of the most promising tokens in the past year. After managing to survive the 2018 bear market, the token is currently valued at $2.86 and holds a market capitalization higher than $2 billion.
Developed by Arthur Breitman, an ex-Morgan Stanley analyst, Tezos is a multi-purpose platform that supports decentralized applications and smart contracts. The platform combines a self-corrective protocol and on-chain governance to manage network modification and support Turing complete smart contracts. Tezos tokens are not mineable due to the proof-of-stake consensus mechanism and are created through a process called baking.
Tezos still upbeat in the long run
Ranking 10th on the coinmarketcap.com list, Tezos is still viewed as a reliable cryptocurrency, despite being down 3.5% at the time of writing. Some might view the lawsuit as a setback, but the Tezos Foundation already claimed the settlement is in the best interest of the Tezos project and community as a whole, considering the expenses and time that would have been required to continue fighting the case.
Only little over 10% of the funds raised during the ICO will have to be returned, a favorable condition if we consider that most of the other ICOs charged with similar allegations had to return all the funds raised. Blockchain safety and security is still a priority and Tezos continues to be a cryptocurrency benefiting from the high trust. That’s due to its founders as well as the innovative blockchain solution is provides.