The Tezos Foundation have announced they will to seek settlement in all of the legal cases outstanding in California state and federal courts rather than continue with contesting the allegations. The Foundation along with founders of the Tezos blockchain, Arthur and Kathleen Breitman, have faced a barrage of lawsuits from plaintiffs stemming from the initial coin offering (ICO) in 2017.
An update on civil litigation involving the Tezos Foundationhttps://t.co/vKTvMJoBw9
— Tezos Foundation (@TezosFoundation) March 20, 2020
While exact details of the proposed settlement for the ICO class actions are still be released, the total sum involved to resolve all pending litigation is reported to be around $25 million.
The successful Tezos ICO raised $232 million with widespread hopes the Delegated Proof of Stake (DPoS) model would prove a viable competitor to industry leaders such as Ethereum.
However, the project soon became immersed in an internal quarrel amongst the key stakeholders which led to a number of individual ICO contributors to lose faith and seek financial redress by alleging the raising of funds through the ICO was in breach of U.S. securities laws.
If a legal agreement is reached, it is not clear how many of the original ICO participants will proceed to actually file a claim when the appropriate time comes.
According to the Tezos Foundation, reaching a settlement now is in the best interest of the Tezos community as a whole even though they continue “…to believe the lawsuits were meritless and continues to deny any wrongdoing.”
In explaining the decision, the Foundation state that “…lawsuits are expensive and time-consuming, and it was decided that the one-time financial cost of settlement was preferable to the distractions and legal costs associated with continuing to fight in the courts.”
The proposed settlement is currently pending approval by a federal judge.