Tezos (XTZ) has paid out $25 million to settle with investors accusing them of hosting an illegal securities sale in the form of their initial coin offering (ICO).
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.
The damages
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.”
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