Tezos Tokens ‘Fundraiser’ Sparks Another Securities Lawsuit

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Dynamic Ledger Solutions, Inc., The Tezos Foundation, and three individuals who control the companies have been accused of violating federal securities laws by selling unregistered securities disguised as a “fundraiser” to finance the launch of a new cryptocurrency known as Tezos. The defendants allegedly asked for “donations” of bitcoin and ether in exchange for a “recommendation” that contributors be awarded an equal value of Tezos tokens when, or if, the new blockchain is launched. The plaintiff in the case argues that despite the defendants’ labels, the transaction was essentially a sale of securities, noting that donators were expecting their contributions to eventually be worth more than they invested.

The suit further argues that even the individual defendants themselves struggled to “maintain the illusion” that they were not selling investments, citing several interviews during which they referred to their actions as a “sale.” According to the complaint, the defendants have attempted to avoid regulation in an area of “relatively new technology” and have denied investors the rights and protections afforded to them under federal law.