Tezos Foundation, the first blockchain company to be prosecuted for allegedly violating securities laws, is still facing the lawsuit against its ICO, as a federal court judge ruled against case dismissal.
In July, the Tezos Foundation raised $232 million and has been facing four charges for the sale of unregistered securities. The lawsuits that were filled by Tezos contributors have now merged into one with a lead plaintiff Arman Anvari.
The defendant stated that the ICO didn’t fall under the US Securities and Exchange Commission’s authority, as it was managed by Tezos Foundation in Switzerland. The judge noted:
“In establishing and aiding the Tezos Foundation rendered the two entities deeply intertwined, if not functionally interchangeable, throughout the ICO process.”
“This argument is a strong one, and may well threaten Anvari’s access to this forum pending discovery. It is not enough, however, to require dismissal or transfer at this juncture,” Seeborg stated.
The judge later stated that Anvari, who invested 250 Ethereum, made this transaction using a website in Arizona. Besides, the plaintiff found out about the offer from a market that targets almost only US residents.
The case documentation mentions two other defendants – Tim Draper, a venture capitalist who supported the project, and a firm Bitcoin Suisse which was a sort of mediatory services to some of Tezos ICO contributors.
Draper’s motion has, for now, been granted with leave to amend, and as for Bitcoin Suisse, it’s been dismissed as a defendant, because it ’’doesn’t appear to be a key player in this action.”