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San Diego law firm seeking full rescission in class action against Tezos, alleging ICO broke securities laws.
Tezos, the Tim Draper-backed uncapped ICO which raised over $232 mln in July, has been fraught with major problems ever since. However, matters have begun to come to a head, sending futures prices off a veritable cliff, down some 75%.
The major event that sparked the decline was the announcement by the Breitmans on Medium that the Tezos platform was still in the alpha stage, and that investors should not expect a rollout until February 2018 at the earliest.
Further, the letter made it clear that there were deep conflicts of interest at the highest levels in the corporation. President Johann Gevers was quick to respond via Reuters, suggesting that the Breitmans were seeking an ‘illegal coup.”
With all the chaos, and the sudden and massive loss in value of futures, investors are essentially at a loss. Until the platform launches and tokens are allocated, investors are unable to exit their positions and have nothing to show for their investments.
With the chaos at the top, and values plummeting, a San Diego law firm is investigating the circumstances in order to file a class action lawsuit. Under such an action, the goal of the firm would be the full rescission of the investments and a return of all funds raised. According to the statement:
It appears likely that DLS, the Breitmans, and the Foundation have violated U.S. securities laws in conducting the ICO. If the Tezos tokens are “securities” sold to U.S. investors, the law requires the sale to be registered with the SEC. Here, it is clear that the tokens were never registered. In this situation, one of the chief remedies is rescission of the transaction. U.S. investors could get their money back.
Whether the law firm is right or wrong, something must come from the massive upheaval surrounding Tezos at this point. Whether from the private sector or the SEC, investigations will certainly be forthcoming.
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