Tezos ICO class action lawsuit will go ahead

Posted: 9 August 2018 4:27 am
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However, the court dismissed cryptocurrency brokerage Bitcoin Suisse as a defendant in the case.

The Tezos Foundation recently filed a motion to dismiss a class action lawsuit that claims the company violated US securities laws. This week, a federal court judge denied the motion, meaning that the lawsuit will proceed.

Tezos and their US-based company Dynamic Ledger Solutions (DLS) were originally facing four separate class action lawsuits following their initial coin offering (ICO), which raised US$232 million last year. Now, these lawsuits have been consolidated into one dispute, led by the primary plaintiff Arman Anvari.

The court case documents, uploaded by Coindesk, reveal that California District Judge Richard Seeborg dismissed Tezos founders Arthur and Kathleen Brietman's recent attempt to block the lawsuits.

The Brietmans implied that because the Tezos Foundation is based in Switzerland and the ICO was carried out from there, the couple and DLS should not be liable for any damages incurred by US-based constituents.

"This argument is a strong one, and may well threaten Anvari's access to this forum pending discovery," Judge Seeborg said. "It is not enough, however, to require dismissal or transfer at this juncture."

However, the court did dismiss cryptocurrency brokerage firm Bitcoin Suisse as a defendant in the case.

In mid-April the US Financial Industry Regulatory Authority (FINRA) fined Tezos co-founder Arthur Breitman $20,000 and suspended the cryptocurrency executive from associating with broker-dealers for up to two years.

The US regulator enforced the penalty as part of a settlement pertaining to allegations that Breitman had not revealed his role in Tezos while he was actively employed at investment firm Morgan Stanley in 2014/15. Registered securities professionals are required by law to provide written notice to employers if they wish to conduct any exterior business activities for which they expect to receive compensation.

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