Tezos settles the class-action lawsuit over its $232M ICO – a report by Sahil Kohli.

Tezos has settled the class-action lawsuit over its $232 million ICO and will compensate investors who sold their XTZ tokens and lost money on the investment.

The Tezos Foundation has settled the class-action lawsuit that has been in progress since 2017. The company settled with plaintiffs for $25 million for its ICO, which raised $232 million. Investors who bought XTZ tokens during Tezos’ initial ICO are eligible to file a claim. Investors who sold tokens prior to Nov. 25, 2019, at a loss are also eligible for compensation. However, investors who still hold their original XTZ and those who have not sold XTZ at a loss will not be eligible to file the claim. 

 

Tezos settles the laws suit for $25 million. 

Tezos settled the class-action lawsuit over its multi-million ICO for $25 million. However, investors would still need to do quite a bit of work for their payouts. Lawyer and Tezos blogger Alex Liu says that users may need to collect a lot of information, including contribution addresses, emails, and self-calculated losses. Furthermore, those who receive compensation may need to pay taxes on that amount. Investors “might be getting back a small nominal amount,” Liu noted. The class-action lawsuit settlement also means that investors cannot launch a similar lawsuit around Tezos’ security status in the future. 

 

The US SEC did not reveal whether it considers XTZ as security. 

The class-action lawsuit asked the question of whether Tezos’ ICO constituted an unregistered security offering. The settlement did not find that Tezos is a security, and the Tezos Foundation will continue to deny that XTZ is security. The outcome of the case only means that investors must be compensated for their losses. The case has little bearing on whether the Securities and Exchange Commission considers XTZ is security. Statements from 2018 suggest that US SEC is keeping documents on Tezos, even though the regulator has not taken any direct action against the organization. 

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Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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