Tezos attempts settling at $25 Million with all lawsuits against it in the state of California according to a press release on the website. Making sure to emphasize that the court cases were unfounded, the foundation clarified that it is only settling because it will be easier to focus on things that matter after settling. The cost of litigation and energies spent towards that endeavour is causing a loss of efficiency for the foundation.
The Tezos Foundation hopes to settle $25 Million of the consolidated class-action lawsuit in the federal courts of California. They have been fighting the lawsuit for two years and have “wasted” a lot of resources on fighting spurious claims. They made the announcement on March 20th. The announcement made it clear that they could not keep fighting the lawsuit while trying to move the Foundation and token forward. By settling, they believe it will remove obstacles to actualize their vision.
“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 settlement is yet to be approved by the California Federal Court of Law.
$232 Million ICO Scandal looms
The $232 Million ICO scandal still looms over the Foundation. There was a controversy surrounding the sale of the token in July 2017. Many cryptocurrency companies have been struggling with the definition of ICO’s with the SEC calling them unregistered securities. While multiple countries have released a clear definition of cryptocurrencies in the past few months, USA has yet to come out with guidelines. However, cryptocurrencies are taxed just like every other source of income.
The ICO was a record setter with $232 Million made but it brought multiple lawsuits. The most problematic issue was the infighting between the blockchain and cryptocurrency developers and creators and the managing foundation president over the money they collected.
January 2018 saw many accusations against Tezos of using unregulated securities and it all moved to the courts.
Tezos’ council maintains that it did not issue unregistered securities, describing the lawsuit:
“The Tezos Foundation chose to settle all claims because the Tezos Foundation believes it is in the best interest of the Tezos project and community as a whole. The Foundation continues to believe the lawsuits were meritless and continues to deny any wrongdoing.”
By settling, Tezos avoids the risk of having a court rule that its ICO was a securities offering.
Since conducting its record-breaking ICO, Tezos’ assets have nearly tripled in value — with the foundation’s March 9 biannual report revealing that it holds $635 million in assets.
The report also revealed that the foundation has deployed $37.6 million in grant funding for the Tezos (XTZ) network since August 2019.
Tezos attempts settling at $25 Million to move forward with the Tezos vision.
From the Website
Today, the Tezos Foundation and the other defendants have entered into a settlement, subject to court approval, of all putative class action lawsuits, all of which are pending in California state and federal courts.
The Tezos Foundation chose to settle all claims because the Tezos Foundation believes it is in the best interest of the Tezos project and community as a whole. The Foundation continues to believe the lawsuits were meritless and continues to deny any wrongdoing. However, 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.
