The behemoth Tezos ICO, once the darling of the ICO world backed by VC icon Tim Draper, is now the subject of at least one major class action lawsuit with potentially more to follow. The threat of class action came some weeks back after infighting at the top of the company went public.
The class action has been filed in district court in California by attorney James Taylor-Copeland on behalf of investors. The suit alleges that Tezos violated US Securities Law by offering securities, while at the same time “misleading” investors regarding the nature of the company.
Tim Draper defended his position writing in his comment to Cointelegraph:
“There was nothing secretive about our purchase of Tezos. We invested for ownership in the company, which at the time was two bright young people and an idea. The sale might not have happened at all! We also participated in the Pre-sale. Most ICO founders earn tokens over time. All tokens we hope to receive that we didn’t buy in the Pre-sale (alongside with all the other investors who participated) will vest over time with the founders’ tokens. I have no intention of selling these tokens because I am a true believer in the Tezos mission: to build a Blockchain on proof of stake and open it up for developers to build and invent on a new and more relevant platform.”
The suit is not the only one in the works. Other firms are also studying and preparing for potential lawsuits, including Florida-based firm Silver Miller. Investors who feel they have been bilked out of funds can contact either firm to be added to the class action. According to the report:
“Taylor-Copeland said the proposed class includes an estimated 30,000 people who bought Tezzies and seeks to allow them to rescind their purchases and other damages. He said the lawsuit may be the first civil action brought over an ICO.”