As Tezos faces a public lawsuit from its ICO investors, Alex Tapscott’s NextBlock Global has opted to return funds to investors.

In a further hurdle on ICOs’ path to legitimacy, the startup announced Sunday it had made the decision after Forbes broke a scandal about it inventing ‘advisors.’

“As a young company, we have stumbled in our efforts to take our company public and we will work hard to rebuild the trust of those we have disappointed,” a press release reads.

NextBlock had stated Civic CEO Vinny Lingham and federal prosecutor Kathryn Haun - now on Coinbase’s executive board - were advising the project. This was not true, but Tapscott responded to Lingham denying the claims even as Lingham himself “was looking at the deck with his face and bio” on NextBlock’s website.

The U-turn by Tapscott, who is a well-known name in Blockchain, adds to suspicions that ICO schemes even from notionally ‘proven’ legitimate parties are not all they seem.

Tim Draper, a major stakeholder in Tezos, has continued to defend the project amid worsening relations with investors over a schism with the Swiss foundation elected to guard ICO funds now worth around $500 mln.

Reactions to Cointelegraph’s latest report on an accompanying lawsuit suggest only a small section of investors are unhappy with the delay in trading Tezzies, which originally sold over a month-long sale in July.

NextBlock made no mention of the allegations against it in the press release meanwhile, simply stating its “first responsibility is to… existing investors.”

“We strive to always act in the best interest of our investors and we are in the process of reaching out to each of them to discuss next steps, including the return of their original investment, timing, and participation in any profits,” it confirmed.