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Second class-action law suit lodged against Tezos


Investors piled their crypto assets into the Tezos ICO in the summer (Reuters) - Click to enlarge

A second class-action lawsuit has been lodged in the United States against the founders of the tokenised blockchain project Tezos, and the Swiss-based foundation that houses hundreds of millions of dollars of investors’ money.

The law firm Silver Miller Law presented its complaintexternal link in Florida this week, following a California lawsuit issued last monthexternal link. Other US law firms are also threatening to sue Tezos founders Arthur and Kathleen Breitman, and the Tezos Foundation, which is headed by president Johann Gevers.

Gevers and the Breitmans are embroiled in a public dispute over governance at the Tezos Foundation, each accusing the other of malpractice. Gevers is accused of “self-dealing” regarding a bonus (a charge he denies) while he has returned fire with the allegation of an attempted illegal coup to oust him as president.

The bitter row has set the project back months and plummeted the price of Tezos token (Tezzies) futures on derivatives markets. The new lawsuit claims that investors were misinformed about the terms of the Tezos initial coin offering (ICO) in the summer that raised $232 million (CHF229 million) in a matter of days. The value of that pot has now swelled to around $600 million (according to the lawsuit) as the price of cryptocurrencies rocketed in the last months.

Furthermore, the Florida lawsuit claims that the ICO, including the establishment of the Tezos Foundation in Switzerland, was “designed with specific intent of evading US federal and state securities laws; and in doing so, to prevent Plaintiff and the Class of the ability to enforce [their] rights in US courts”.

Silver Miller argues that the Florida courts do have jurisdiction in the case, claiming that the ICO violated securities laws.


The dispute between Gevers and the Breitmans in expected to reach a critical stage in the coming weeks. An external audit of the foundation’s books is due to be presented to the foundation board. Their deliberations will be being closely watched by the Swiss Foundation Supervisory Authority and the Swiss financial regulator.

On Tuesday, the cryptocurrency financial services provider Bitcoin Suisse moved to calm investor fears by revealing it can block any payments being made by the Tezos Foundation.

In its statementexternal link, Bitcoin Suisse says it is “currently not aware of any evidence that Contributor funds have been mismanaged, lost or put at risk by the Tezos Foundation or any party involved in the project”. But the statement also added that investors are not entitled to a refund.

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Matthew Allen
When not covering banks, tax disputes, trade, Brexit, the World Economic Forum and FIFA,'s business correspondent can be found playing cricket on various grounds in Switzerland - including the frozen lake of St Moritz. Initials: mga
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