Tezos organizers sued in California over crypto currency project

Tezos co-founder and CTO Arthur Breitman and his wife and co-founder Kathleen Breitman respond to questions during the Money 20/20 conference in Las Vegas
Tezos co-founder and CTO Arthur Breitman and his wife and co-founder Kathleen Breitman respond to questions during the Money 20/20 conference in Las Vegas, Nevada, U.S. on October 24, 2017. REUTERS/Steve Marcus

November 3, 2017

By Anna Irrera and Steve Stecklow

(Reuters) – A class-action lawsuit has been filed in a California state court against the organizers of the technology project Tezos, which in July raised $232 million in one of the largest “initial coin offerings” (ICOs) ever.

The lawsuit, filed on Oct. 25 in the California Superior Court in San Francisco, alleges that Tezos’ organizers violated U.S. securities laws and defrauded participants in the online fundraiser.

ICOs have become a popular way for technology companies to raise money by issuing new cryptocurrencies to raise capital.

Tezos, however, has yet to issue any digital coins and participants were told they were making a donation and may never receive any.

The defendants include Kathleen and Arthur Breitman, the co-founders of the project; their Delaware-based company Dynamic Ledger Solutions Inc, which owns the source code; and Strange Brew Strategies, a communications firm hired to promote the venture.

Defendants also include the Tezos Foundation, a Swiss entity that the couple helped establish to handle the ICO, and its president Johann Gevers. 

Brian Klein, an attorney for the Breitmans, said the lawsuit “is without merit” and the couple “are going to aggressively defend themselves.”

The Tezos Foundation and Strange Brew declined to comment.

The other defendants did not immediately respond to requests for comment.

The lawsuit quotes extensively from a Reuters investigation published Oct. 18 that reported on a battle between the Breitmans and Gevers over control of the Tezos project.

The dispute has significantly delayed the venture, which aims to create a computerized network for transactions using blockchain technology.

The lawsuit is asking that plaintiffs receive a refund as well as damages. It alleges that the organizers sold unregistered securities.

Several other U.S. law firms have said they are investigating the Tezos ICO for possible litigation.

(Reporting by Anna Irrera in New York and Steve Stecklow in London; Editing by Bernadette Baum)

  • Dave Clark

    So people are mad because they bought imaginary money, with real money, to make imaginary profits for their real bank accounts….and now they are going to throw away more real money on lawyers…..???

    • Tim maher

      Perfect liberal logic.

  • Jesse

    just buy bitcoin and retire

  • intimeforthedime

    So basically you are saying there are at least 232 million idiots on this planet?

    • FromThe70s

      Wow, the “You can become a millionaire too, just send me one dollar to find put how” scam still works!

      • Localdude

        lol…pretty much. But especially for awesome looking young tech people in the picture – giving out hugs and ‘Obama Rules’ pins out at the trendy Hollywood and silicon valley crackers and wine events.. cool! I just Gotta get on their ‘facebook page’ and give them a ‘like’ thumbs up! – yeh..

    • Tim maher

      Most likely all socialist libs too. Probably promised them that Utopia thing.