Tezos saga continues as lead plaintiff withdraws from lawsuit

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Tezos has grabbed the headlines since it raised $232 million in its 2017 initial coin offering (ICO). At the time, it was the largest ICO in the crypto industry, surpassing the previous record set by Bancor at $150 million. However, it’s not been as rosy since. 

Just four months after completing the ICO, disgruntled investors hit the project with a class-action lawsuit. The lead plaintiff has been Arman Anvari, an investor who put in $270,000 into the project. However, in what has been a process full of twists and turns, Anvari has recused himself as the lead plaintiff.

In his declaration, Anvari stated that he felt he would not “adequately represent the putative Class.” He would continue to comply with all his duties as the lead plaintiff for now, he stated.

Anvari has been the subject of intense scrutiny by a team put together by the lead defendants, Kathleen and Arthur Breitman. The Breitmans are the founders of Dynamic Ledger Solutions, the company behind the Tezos project. The two have put up a spirited fight against the class action lawsuit. Discrediting the plaintiffs has been one of their key strategies. And it has worked with the withdrawal of Anvari.

The Breitmans allege that they discovered posts made by Anvari on Reddit indicating that he didn’t consider the Tezos tokens as security at the time of investment. This effectually invalidates Anvari’s claims on the lawsuit where he alleges that Tezos broke several federal securities laws. 

The Breitmans further allege that Anvari continued to buy Tezos tokens even after filing the lawsuit. Moreover, Anvari used language that was racist, anti-Semitic and homophobic, they alleged in their brief. 

In response, Anvari denied what he termed as “malicious and gratuitous attacks” on his character. In an emailed statement to Reuters, he stated:

“Although I no longer desire to be involved in this litigation, I categorically deny the defendants’ malicious and gratuitous attacks on my character and their claims that I am hateful toward any group of people.”

The Breitmans have asked the court to halt the plaintiffs’ efforts to select a new lead plaintiff of their choice. They called unto the judge to reopen the lead plaintiff selection process as mandated by the law. Should the lead counsel select a new lead plaintiff unilaterally, it would “contradict the clear purpose of the statute,” they said in their brief.

And yet, the Breitmans aren’t the only people opposing the lawsuit. A group that identifies itself as the Tezos Legion has set it upon itself to work to discredit the plaintiffs. In a Medium post just days ago, the group stated:

“Worse still, the case does nothing to protect anyone in the actual Tezos community, nor do the lawsuits even attempt to reflect actual concerns of the Tezos community. Based on our research, it appears that the plaintiffs’ attorneys are inventing their own case by harming the project’s reputation and suppressing the price of the Tezos’ native XTZ token for their own enrichment.”