{"id":538,"date":"2017-10-19T11:35:36","date_gmt":"2017-10-19T11:35:36","guid":{"rendered":"https:\/\/www.silvermillerlaw.com\/?p=538"},"modified":"2024-04-17T20:36:08","modified_gmt":"2024-04-17T20:36:08","slug":"tezos-initial-coin-offering-give-us-230-million-well-give-tote-bag","status":"publish","type":"news_posts","link":"https:\/\/www.silvermillerlaw.com\/press\/in-the-news\/tezos-initial-coin-offering-give-us-230-million-well-give-tote-bag\/","title":{"rendered":"Tezos Initial Coin Offering – You Give us $230 Million, We’ll Give You a Tote bag"},"content":{"rendered":"

In July 2017, tech start-up Tezos conducted what was then the largest Initial Coin Offering (ICO)<\/a> in history, raising $230 million in just 13 days of crowdfunding to develop its own decentralized blockchain.\u00a0 Just three months later, however, details of behind-the-scenes in-fighting between the principals operating Tezos have raised rampant concerns about the viability of the yet-to-be launched project; and many in the industry believe contributors to the fundraiser will receive nothing for their investments.\u00a0 In the $2.2 billion world of ICOs, some industry experts predict that more than 90 percent of ICOs will fail and provide nothing of value to their investors.<\/p>\n

According to a detailed investigative report published by Reuters (http:\/\/www.reuters.com\/investigates\/special-report\/bitcoin-funding-tezos\/<\/a>), Arthur and Kathleen Breitman — the American couple that founded Tezos and own its source code through a Delaware company — and Johann Gevers — the president of Swiss-based Tezos Foundation, which was created to conduct the ICO, hold the investors\u2019 funds, and promote Tezos\u2019 blockchain technology — are embroiled in a bitter dispute over control of Tezos\u2019 future and the funds obtained from investors.\u00a0 As the Breitmans and Gevers battle one another for power and control, Tezos\u2019 investors are caught in the middle, not knowing what will happen to their funds.<\/p>\n

Moreover, the report states that the Breitmans view their fundraising effort not as participants\u2019 speculative investment in new technology; rather, the Breitmans have taken the position that the funds raised (now valued at over $400 million) are non-refundable donations to Tezos\u2019 efforts.\u00a0 As Kathleen Breitman told Reuters: \u201c[P]articipating in the Tezos fundraiser was like contributing to a public television station and receiving a \u2018tote bag\u2019 in return.\u00a0 That\u2019s the same king of thing here.\u201d\u00a0 Many notable investors, however — including Silicon Valley venture capitalist Tim Draper — expect much more than a metaphorical \u201ctote bag.\u201d\u00a0 They view their contributions as investments and expect a valuable return on those investments.\u00a0 As Mr. Draper told Reuters, he views cryptocurrencies as commodities like pork bellies and characterized his participation in the Tezos ICO as a purchase, not a donation.<\/p>\n

This story will continue to unfold as the principals battle one another for control of Tezos and government regulators in the United States and Switzerland investigate the matter as well.\u00a0 Earlier this year, the United States Securities and Exchange Commission (SEC) expressed its own skepticism about the legality of ICOs and cautioned that, depending upon the facts and circumstances of each ICO, the cryptocurrency provided to ICO investors can be deemed a \u201csecurity\u201d — the sale of which is subject to federal securities laws, including registering the security with the SEC or obtaining from the SEC an exemption from registration.\u00a0 In Tezos\u2019 case, the \u201cTezzies\u201d given to each investor were not registered with the SEC, nor did Tezos seek or receive an exemption from registration.<\/p>\n

Silver Miller currently represents the victims in class action lawsuits against multiple cryptocurrency exchanges (Cryptsy and Kraken) and is investigating Tezos<\/a> and several other companies that conducted ICOs within the past year for potential regulatory violations and misrepresented solicitations.\u00a0 If you have invested in an ICO and are concerned that your investment is in jeopardy or that you have been defrauded, contact Silver Miller contact us<\/a> for a no-cost, no-obligation consultation to discuss you legal rights.<\/p>\n","protected":false},"featured_media":1921,"template":"","meta":{"_acf_changed":false,"_links_to":"","_links_to_target":""},"news_categories":[10],"class_list":["post-538","news_posts","type-news_posts","status-publish","has-post-thumbnail","hentry","news_categories-uncategorized"],"acf":[],"yoast_head":"\nTezos Initial Coin Offering - You Give us $230 Million, We'll Give You a Tote bag - SilverMillerLaw.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.silvermillerlaw.com\/press\/in-the-news\/tezos-initial-coin-offering-give-us-230-million-well-give-tote-bag\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tezos Initial Coin Offering - 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