The court heard arguments from a Tennessee couple who were charged tax on the creation of 8,876 units of Tezos digital currency.
The Tezos class action lawsuit may have come to an end, but the two legal firms involved are engaged in a battle over the settlement fee.
In 2017, the XTZ ICO raked in a whopping $232 million and was considered the largest token sale at the time. However, months later, the ICO participants banded together to file a class-action lawsuit against Tezos. The legal battle between Tezos and its ICO investors has gone on for years, but the company has finally settled.
Because the court ruled in favor of the plaintiffs, Tezos will be paying its investors a total of $25 million in damages. The key figures in the lawsuit are set to receive between $5,000 and $7,500, the plaintiff’s lawyers will receive $8 million in legal fees, and the other $16.5 million will be distributed to token sale participants who have experienced a loss due to their investment in the so-called digital currency. It’s also important to note that no settlement money will be distributed to ICO investors who profited off of their Tezos investment.
Was it a securities sale?
Interestingly, although the court sided with the plaintiffs in the case, the court did not make any sort of decision regarding whether or not the Tezos ICO was an illegal securities sale. Although Tezos paid the settlement fee, they also made it clear that:
“The Foundation continues to believe the lawsuits were meritless and continues to deny any wrongdoing. However, lawsuits are expensive and time-consuming, and it was decided that the one-time financial cost of a settlement was preferable to the distractions and legal costs associated with continuing to fight in the courts. The Tezos Foundation chose to settle all claims because the Tezos Foundation believes it is in the best interest of the Tezos project and community as a whole.”" title="Tezos settles ICO lawsuit for $25 million" />
No settlement money, however, will be distributed to ICO investors who profited off of their Tezos investment.
Tezos has agreed to a $25 million settlement with U.S. investors who invested in its ICO three years ago.
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Perhaps believing they’d lose badly in court, the Tezos Foundation have decided to settle their ICO lawsuit out of court.
Venture capitalist Tim Draper has been let off the hook with regards to a class action suit brought by investors of the ill-fated Tezos digital coin.
In an attempt to regain some footing and possibly some of the public trust it has lost, Tezos entered a deal with PricewaterhouseCoopers (PwC), which will “act as the external auditor for the Foundation’s finances and operations.”
Bitcoin Suisse AG has filed a motion in an effort to be removed from a lawsuit against Tezos, indicating that it was in no way involved with the initial coin offering (ICO) launched by the startup in 2017.