The United States Securities and Exchange Commission (SEC) has been keeping an eye on many of 2017’s ICOs. The view of the SEC seems to be that these ICOs were unlicensed, and therefore illegal securities.
Since late 2017, the Swiss-based Tezos Foundation has been litigated for ICO practices. Not only were investors misled, say litigators, but the ICO was an unlicensed and unregulated securities sale. This is one of the first major cases to tackle the ICO issue.
On Friday, the settlement between investors and Arthur and Kathleen Breitman, founders of the Swiss-based Tezos Foundation, came to an end. The foundation paid the full amount of $25 million. “All persons” who purchased coins in the July 2017 ICO will receive a portion of the settlement.
The Tezos blockchain recently celebrated two years since its inception.
Though the judge did award plaintiffs money in the settlement, it did not rule on whether or not the sale was technically a securities sale.
Despite the lack of judgment on the issue, the three-year-long court battle came to an end. After a public hearing on Thursday, the judge terminated the case on Friday. As per the order, attorneys will receive $8.5 million per their fee. Tezos ICO participants who lost money will receive the remainder of the settlement. The court awarded damages only to those plaintiffs who lost money.
While this case did not rule on the legal status of ICOs, other such laws are in the works. The U.S. Congress is considering different bills to codify laws about cryptocurrency. This includes the “Cryptocurrency Act of 2020”, introduced in March.