The Tezos cryptocurrencies project has completed ICO (initial coin offering) in July 2017. It became the most profitable in the history. The startup has collected 232 million dollars just in 13 days. Now Tezos’ ICO investors plan to defend their interests in the court.
What is Tezos
Tezos is a blockchain with a new development concept. Protocol change of existing cryptocurrencies such as Bitcoin or Ethereum is based on hard forks when blockchain is splitting into two branches. Tezzos supposes a steady evolution of blockchain with the use of network management. Project creators plan that developers will offer protocol changes and set prices for their work. Tezos believes to create a more motivated developers community and better cryptocurrency due to such reward system. Among the others it’s worth noticing the unlimited number of coins during ICO, they were purchased by all. Probably it has negatively influenced project development, because its value became overestimated.
A conflict between co-founders broke out three months after ICO because of the problems company was facing. The conflict endangered further project development.
The heart of the conflict
Tezos founders Kathleen and Arthur Breitman sued Johann Gevers, the head of Tezos Foundation for using his position in personal interests. Breitmans are the owners of the original code of Tezos. Tezos Foundations manages the biggest part of project financial assets.
Gevers declares they just try to get rid of him from the project by making provocative and false statements. He believes Breitmans want to get the control over the fund despite all the rules and subject a multimillion-dollar project to serious risk by interfering into management matters. According to Gevers it is they who are to blame for the delay in launching the project.
Arthur and Kathleen note the unfounded accusations and consider their actions to be completely legal.
So far only Tezos’ futures and derivatives but not the tokens are available on the stock exchange. After ICO the securities grew a lot, mainly due to the growth of Bitcoin and Ethereum. But the price fell by almost 60% against a background of public conflict.
Investors feel the conflict is far from being solved and an initiative group started its own investigation. The company Block & Leviton LLP took up the matter. The company specializes on cases related to securities. Lawyers do not exclude that during ICO securities laws were broken. Confirmation could only aggravate the position both of founders and investors.
On the conference Money 20/20 took place in October in Las Vegas Breitmans declared they continue to develop the Tezos platform and will try to overcome difficulties.
The future of ICO
Attracting investments through ICO becomes more and more popular. Successful projects collect funds through ICO, grow and return investors a good profit, up to thousands of percents. But not all the ideas are successful. Moreover this way of attracting investments can be used by unscrupulous entrepreneurs aimed only at obtaining benefits and not at creating a good product. That projects are called scam.
Governments of many countries are raising the issues of creating a legislative base and ICO control. In the countries like China and South Korea ICO are totally banned.