The Tezos ICO initiative has been pretty interesting to keep an eye on. Although things are not going exactly as planned, the project is still not dead and buried either. Despite the ongoing class action lawsuits, things may yet come together in the end. To cover their legal expenses, the Tezos founders are looking to the Tezos Foundation. Whether or not their request will fall on deaf ears remains to be seen.
The Tezos Saga Continues
The past few months have been pretty troublesome for the Tezos project, which was only to be expected. After raising a few hundred million dollars through an ICO, the team has been unable to keep any of its promises. The tokens have still not been issued to investors, and it seems that particular matter will not be resolved all that easily. As a result, multiple investors launched a class action lawsuit against the founders of this project, even though the founders claim it is up to the Tezos Foundation to move things along.
It is evident this legal battle will take up a lot of time and money, and covering the associated legal fees will not be easy either. Consequently, the Tezos founders are hoping the Swiss Foundation can bail them out. This is a rather interesting approach, as it means the company is planning on using money raised from investors to cover the bill of its legal tussle with said investors.
There is still the question as to whether or not the Foundation will help the founders in covering these fees. After all, the relationship between the project founders and this foundation is not ideal by any means. In fact, it was this dispute which caused the legal battle to ensue in the first place, and it is highly unlikely the foundation will foot the bill. At the same time, the founders can’t honestly expect ICO investors to foot this bill either. A very dangerous precedent will be set regardless of how things play out; that much is certain.
Indeed, Arthur and Kathleen Breitman may have bitten off more than they can chew with their Tezos project. Although they did everything properly – including the legal aspect and setting up a foundation in Switzerland – the team running the actual show has opposed them for quite some time now. The three class action lawsuits may only be the beginning of what is yet to come, depending on how long it takes to issue tokens to investors. Right now, the founders face charges of defrauding participants and violating federal securities law.
To make matters worse, the Tezos ICO funds have increased in value substantially since July. While the raised funds were worth over US$200 million at the time, they are now worth well over US$325 million. It is evident a lot of investors are growing concerned over missing out on those gains as well as not being able to trade these tokens. A lot of people invest in ICOs for quick profits, regardless of the potential risks. In this case, those consequences are readily apparent.
Whether or not all of this will hinder the success of Tezos remains to be seen. It is certainly true this project has gotten a lot of negative attention in recent months. It is not unlikely that a lot of investors will sell their tokens once they become available and abandon the project altogether. An interesting future lies ahead for Tezos and everyone who invested in it. Rest assured this is not the final development for this project, as there are still plenty of unresolved matters.
