Tezos Execs Want To Finance Legal Defense With Token Offering Funds

By | December 3, 2017

Tezos Execs Want To Finance Legal Defense With Token Offering Funds

Tezos co-founders Arthur and Kathleen Breitman are reportedly hoping to use money raised in the company’s token offering to pay their legal bills as they defend themselves against class-action lawsuits alleging fraud and the sale of unregistered securities.

According to a December 1 Reuters article, Arthur and Kathleen Breitman, the married couple who founded the embattled blockchain firm Tezos, want to use proceeds from the company’s token offering to fund their legal defense.

The two, along with associates, are the subjects of multiple US class-action lawsuits that allege fraudulent behavior, the first of which was filed on October 25. Plaintiffs are seeking the return of money given during the company’s fundraiser, in part because they never received the digital tokens (known as Tezzies) that they believe their investments entitle them to. They also hope to win damages and costs.

The couple has apparently expressed a desire to have the Swiss-based Tezos Foundation cover the associated legal fees. The foundation’s president, Johann Gevers, is reportedly fighting the Breitmans for control of the organization, which is currently in possession of the proceeds accumulated during the token offering. In essence, the duo is seeking to fund their legal defense with some of the money that their plaintiffs claim should be returned. The Foundation is said to be withholding this money from them.

Addressing the matter, Georg von Schnurbein, who co-authored a book about the governance of Swiss foundations, expressed his belief that “there is no reason for [the foundation to fund the Breitmans’ defense] because their activities were connected to their Delaware company, not to the foundation.” 

Adam Reese is a Los Angeles-based writer interested in technology, domestic and international politics, social issues, infrastructure and the arts. Adam is a full-time staff writer for ETHNews and holds value in Ether.

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Published at Fri, 01 Dec 2017 23:39:09 +0000