A Californian judge has given preliminary approval for the Tezos Foundation’s proposed $25 million settlement to end a consolidated class-action lawsuit after initial coin offering (ICO).
The lawsuit dates back to shortly after Tezos‘ initial coin offering (ICO) of $232 million in July 2017, when investors began filing claims against the firm, accusing Tezos of issuing unlicensed securities in the United States.
The judge wrote, according to court documents from an April 30 hearing, “the Court will probably be able to approve the settlement, subject to further consideration at the hearing of the settlement.” Settlement hearing date has yet to be set.
If the foundation finds itself liable in the suit, damage estimates range from under $1 million to over $150 million. The proposed settlement of $25 million will provide class-action members with damages equivalent to between 16% to more than 100% of the estimated damages.
Tezos Denies Any Wrongdoing
During their ICO, the foundation denies any wrongdoing and wrote in a blog post they had chosen to settle out of court because lawsuits are “costly and time-consuming” and preferred a one-time financial cost:
“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. The Foundation continues to believe the lawsuits were meritless and continues to deny any wrongdoing.”
The SEC has also investigated the firm in relation to its ICO, but a case against Tezos is yet to be brought. Should the current settlement be finalized, it may be more difficult for the SEC to construct a case that the Tezos Foundation acted in bad faith.
While some investors may have been afraid of the lawsuits away from Tezos, supporters do not seem too concerned with one Reddit user saying “it’s water under the bridge…” and another saying they were “a lot more worried about the SEC than this class-action.”
Tezos’ assets have nearly tripled in value since the ICO’s March 9 report with the Foundation revealing assets over $630 million in value.