- The Tezos Foundation has announced that it will settle all lawsuits that have been filed against them since 2017. The decision is based on the high costs of litigation.
- Despite the settlements, the foundation claims that the ICO was nevertheless legal and has not violated any regulations.
According to a press release dated March 20, 2010, the Tezos Foundation has made a decision on the lawsuits it has pending since 2017. The Foundation and the parties involved have decided to seek settlements, which will be submitted to the court for approval. According to the press release, all lawsuits have been filed in federal courts in the State of California.
As reported by CNF, Tezos has been the subject of several lawsuits since October 2017. Through the Initial Coin Offering (ICO), which took place in July of the same year, the founders of Tezos were able to raise 232 million dollars in Ethereum (ETH) and Bitcoin (BTC). The plaintiffs accuse Tezos of conducting the ICO without having registered XTZ as a security. Consequently, according to the plaintiffs, the Tezos Foundation violated the US Securities Act.
Increasing legal costs for the Tezos Foundation
According to the statement, the Tezos Foundation continues to claim that the claims against it are neither substantiated nor justified, which is why it denies the allegations. Nevertheless, the Tezos Foundation considers it wise to reach a settlement due to the increased legal costs:
(…) lawsuits are expensive and time-consuming, and it was decided that the one-time financial cost of a settlement was preferable to the distractions and legal costs associated with continuing to fight in the courts.
The Tezos Foundation is not the only one facing a lawsuit over its security status. The cross-border payment solutions company, Ripple, faces is facing a similar lawsuit. A number of investors claim to have lost money from the illegal sale of the XRP token. Investors are seeking to have XRP classified as a security. Their goal is to appeal to U.S. law to claim monetary compensation for their alleged losses.
Despite the lawsuits against the Tezos Foundation, the XTZ token had one of the best performances of 2019, although it has followed the general sentiment of the market during the last month. At the time of publication, the XTZ traded at a price of $ .63 with a loss of 9.92% in the last 24 hours and 53.91% over the past month.