- Tezos Foundation raised over $232 million worth of Ether through an ICO in July 2017
- Block & Leviton filed a class-action lawsuit against Tezos, claiming that the foundation was conducting an unregistered securities offering
- Tezos Foundation proposed a $25 million settlement, which is likely to be approved in a settlement hearing on August 27th
- Elegible investors have until October 16th to claim their share of the settlement
On Monday, Block & Leviton, the firm behind the class-action lawsuit against Tezos, notified investors who participated in the Tezos’s 2017 ICO that they may be eligible for a share of a proposed $25 million settlement.
Tezos: another ICO accused of selling unregistered securities
The lawsuit against Tezos Foundation was first filed by Block & Leviton in November 2017. The complaint alleged that the foundation illegally raised over $232 million worth of Ether through an ICO, which the plaintiff believes should be regarded as unregistered securities offering.
The next court hearing in the case of Block & Leviton vs. the Tezos Foundation is scheduled to take place on August 27th. The August hearing is expected to wrap up the legal battle as both parties have agreed to a $25 million settlement. The court only has to officially approve the settlement and proposed plan of allocation and determine whether attorney’s fees will be awarded as part of the agreement. Furthermore, during the April 30 hearing, United States District Judge Richard Seeborg already granted preliminary approval for the settlement, stating that:
“The court will likely be able to approve the settlement, subject to further consideration at the Settlement Hearing (scheduled for August 27th).”
Tezos Foundation deems the legal battle “meritless”
Interestingly, the $25 million settlement was proposed by the defendant, Tezos Foundation, on March 20. The organization said this kind of ending to the legal battle “is in the best interest of the Tezos project and community as a whole”.
Tezos Foundation officially proposed the settlement due to the expenses and time associated with continuing to fight the case. However, if the deal gets approved, Tezos could also avoid the risk of its ICO being named a securities offering, which could incur a fine of up to $150 million.
Despite proposing the settlement, the Tezos Foundation denies any wrongdoing.
Investors have until October 16 to submit claims
According to a press release from Monday, Block & Leviton, the firm behind the lawsuit, is has notified qualifying investors that they may be eligible to receive a share of the expected settlement. Investors who participated in Tezos’s initial coin offering between July 1, 2017, and July 13, 2017, are encouraged to submit their claims by October 16th. Should any of the investors object or exclude himself from the settlement class, the deadline is August 6th. Claims and objections can be filed at www.TezosFoundationSettlement.com.