All news is rigorously fact-checked and reviewed by leading blockchain experts and seasoned industry insiders.
- The US federal class action lawsuit against Tezos for violation of the Securities Act is still pending.
- Thus, in the USA it is still questionable whether Tezos (XTZ) will be classified as a security.
Since October 2017, Tezos has been the target of various class action lawsuits in the USA, which accuse the project of being a security within the meaning of American law at the time of its Initial Coin Offering (ICO). The founders of Tezos conducted their ICO in July 2017 and raised 232 million dollars in Bitcoin and Ether. At the time, the Tezos ICO was the largest in history.
According to the lawsuits, the founders of Tezos bypassed US securities laws. They did this by calling the investments in the ICO “contributions” and “donations”. The lawsuits state that the Tezos ICO has all the characteristics of a securities offering and should have been registered with the SEC. If the lawsuit is successful, investors could have the right to regain their investment in the Tezos ICO (in Bitcoin and Ether). They may also be entitled to compensation if they sold their XTZ tokens at a loss.
It is noteworthy that the federal complaint was not filed by the U.S. Securities and Exchange Commission, but by private individuals, investors. The proceedings have been dragging on for several years. It was only on August 7, 2018 that it was decided at all that the suit was admissible in the USA, as it concerned American transactions, although the ICO was conducted in Switzerland.
Class action against Tezos still pending
As a Tezos Community member, Alex Liu, a lawyer from Louisiana and Missouri, has revealed, there is currently still little new movement in the lawsuit. Liu pointed out in a yesterday published blog post on Medium that the lawsuit is still under investigation.
Contrary to some comments on social media, Liu said, the federal-level lawsuit is not over due to the dismissal of a separate state class action in the state of California. The lawsuit at the California court dismissing the Tezos Foundation was legally justified because of the lack of personal jurisdiction over the Tezos Foundation (a Swiss non-profit organization). Liu wrote:
The State Court litigation that dismissed the Tezos Foundation was over the legal basis of lack of personal jurisdiction over Tezos Foundation (a Swiss Non-Profit Entity).
Liu explained that there has been “no significant movement” in the federal lawsuit recently, apart from the fact that it was postponed until early next year. Originally, the next date was scheduled for December 12, 2019. This date has now been postponed to 6 February 2020.
Regarding the price of Tezos, XTZ has been one of the biggest winners on the crypto currency market in recent weeks. Since the beginning of the month, the XTZ price has risen from USD 0.88 (on November 1) to USD 1.32 at the time of writing.
Follow us on Facebook and Twitter and don’t miss any hot news anymore! Do you like our course overview?
