California Judge Won’t Dismiss Tezos Initial Coin Offering (ICO) Lawsuit
The Tezos Foundation is presently on trial for their initial coin offering (ICO), which allegedly violate the securities laws in place by the SEC. Dynamic Ledger Solutions is the other party in this group of four class action lawsuits, which occurred after the company had already raised $232 million last year in the ICO they got in trouble for. The case specifically accuses them of selling securities that remained unregistered, which is strictly against the policies of the SEC. However, the four lawsuits were eventually combined into one before the request for dismissal was ever made, which eventually was called “In Re Tezos Securities Litigations. At the time of writing, Arman Anvari was established as the main plaintiff.
Though there has been moves made in the court system to try and dismiss the class action lawsuit, it seems that the petitioners will not be seeing that dismissal at all, as a federal court judge in California has already stopped them. The petitioners were able to voice their case to dismiss the charge in the last week, but District Judge Richard Seeborg gave a resounding denial on Tuesday this week. The motion was originally filed by the founding couple of the Tezos Foundation, Arthur and Kathleen Brietman, and Dynamic Ledger Solutions (DLS).
In the order written by the judge, the couple said that the fact that they are based out of Switzerland should be enough of a reason to not be charged. Furthermore, they said that the majority of the sale occurred outside of the United States, which they did not feel should be governed entirely by the SEC’s securities laws.
In response, the judge ruled that the support and assistance of DLS “rendered the two entities deeply intertwined, if not functionally interchangeable, throughout the ICO process.” In regard to the dominant location of sales, the judge said,
“Anvari participated in the transaction from this country (the US). He did so by using an interactive website that was:
(a) hosted on a server in Arizona and;
(b) run primarily by Arthur Brietman in California. He presumably learned about the ICO and participated in response to marketing that almost exclusively targeted United States residents.”
The only part of the dismissal that the courts seemed to grant was the request to withdraw Bitcoin Suisse from the lawsuit. They said, “In any event, Bitcoin Suisse does not appear to be a key player in this action.” View the entire court order.