The Tezos lawsuits are likely to set the pace for similar litigation against other players in the ICO field. According to a statement released today by David Silver, a partner at SilverMiner and the lawyer who filed the second lawsuit against the firm, the Tezos case will set crucial legal precedents in a sector so far dominated by legal grey areas. He refers to the lack of clarity in ICO regulations as a “leak in a dam that is about to come down.”
Whilst there is general concern for non-discerning investors who risk losing capital invested with shadier ICO operations, lawyers operating in this particular niche on the other hand are seemingly set for a field day.
Researchers are already studying the various legal interpretations that may be made on ICO-issued tokens, particularly in relation to how and when such tokens may be considered securities which do fall under a well-defined legal framework.
The US Securities and Exchanges Commission has been taking what appears to be a case-by-case approach to ICOs that have been brought to its attention, particularly those of a high profile nature. The number of cases looks set to explode, implying wave of litigations against many other similar crowd-funding events that sit within its jurisdiction.
Picking the Right Targets
As Joel Flemming from Block & Leviton explains, the best ICOs for lawyers are those that raise significant amounts and are based in the US. The company holding intellectual property for Tezos resides in Delaware, Texas. This and the fact that it has numerous participants in the US are likely what have rendered it an attractive target for the SEC.
Other ICO operations which have funds sheltered overseas or which are structurally more complex tend to lie within jurisdictions which render their legal status much more ambiguous or too prove too costly to pursue. US-based ICOs that have been flagged by a disproportionately high number dissatisfied participants tend to draw more attention.