Tezos (XTZ) Class-Action Securities Lawsuit for the $232M ICO Sees $25M Settlement Pending
A class-action lawsuit against Tezos during its 2017 ICO may end in a $25 million settlement. The lawsuit was filed against Tezos for the illegal raising of over $232 million worth of Ether during its ICO.
Filed back in November 2017, the lawsuit by Block & Leviton on behalf of investors that participated in the ICO, claimed that Tezos violated several security laws. The Tezos Foundation also announced its settlement proposal on Mar 20th and stands strong on the belief that the lawsuit itself is baseless.
Block & Leviton informed all investors that participated in the Tezos ICO between July 1, 2017, and July 13, 2017, that they might be eligible for a share of the $25 million settlement offer.
ICO investors were asked to submit the claim of their settlement via [www.TezosFoundationSettlement.com]. Investors have until Aug 6th to object to the settlement offer and until October 16th to submit their claims.
The lawsuit accuses Tezos of being an unregistered security offering and might be the reason why Tezos has decided to settle rather than prolong the case. If Tezos is found to be an unregistered security, it may cost them up to $150 million in direct fines.
United States District Judge Richard Seeborg approved the settlement offer proposed by Tezos on April 30th. In addition, during the final hearing – scheduled for Aug 27th – will determine the legal procedure for initiating the settlement to investors. The court statement approving the settlement offer read:
“The court will likely be able to approve the settlement, subject to further consideration at the Settlement Hearing.”
Looking at recent cases like Telegram and Kik ICO's, which were deemed as unregistered security offerings. Telegram, which conducted one of the biggest ICOs back in 2017, raising billions of dollars in the process, are now unsure if they will ever be able to launch their blockchain Gram token.
Tezos, meanwhile, wants to try and avoid falling into that same legal quagmire and appears to be considering the settlement offer.