CORAL SPRINGS, Fla., Oct. 19, 2017 /PRNewswire/ -- In July 2017, tech start-up Tezos conducted what was then the largest Initial Coin Offering (ICO) in history, raising $230 million in just 13 days of crowdfunding to develop its own decentralized blockchain. 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. 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. Silver Miller (www.SilverMillerLaw.com), a securities fraud and investment loss contingency-fee law firm based in South Florida, is already investigating the Tezos matter on behalf of concerned investors.
According to a detailed investigative report published by Reuters (http://www.reuters.com/investigates/special-report/bitcoin-funding-tezos/), 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' funds, and promote Tezos' blockchain technology -- are embroiled in a bitter dispute over control of Tezos' future and the funds obtained from investors.
Moreover, the report states that the Breitmans view their fundraising effort not as participants' 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' efforts. As Kathleen Breitman told Reuters: "[P]articipating in the Tezos fundraiser was like contributing to a public television station and receiving a 'tote bag' in return. That's the same kind of thing here." Many notable investors, however -- including Silicon Valley venture capitalist Tim Draper -- expect much more than a metaphorical "tote bag." They view their contributions as investments and expect a valuable return on those investments. 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.
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.
Silver Miller currently represents the victims in class action lawsuits against multiple cryptocurrency exchanges (Cryptsy; Coinbase; Kraken) and is investigating several companies, including Tezos, that conducted ICOs within the past year for potential regulatory violations and misrepresented solicitations. 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 for a no-cost, no-obligation consultation to discuss you legal rights.
David C. Silver
Silver Miller – Managing Partner
Telephone: Florida 954-516-6000, Maryland 240-516-6000, and Washington, D.C. 202-852-6000
SOURCE Silver Miller