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Tezos ICO Class Action Emerges After Motion to Dismiss was Denied

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A California federal court judge has obstructed a move that was supposed to dismiss a class action lawsuit which claimed that the primary coin offering (ICO) carried out by the Tezos Foundation desecrated the securities laws within the U.S.

The pronouncement was made on Tuesday, as the motion filed by the Tezos foundation, Kathleen and Arthur Brietman (their founding couple), and also their U.S. based firm DLS (Dynamic Ledger Solutions) was denied by Judge Richard Seeborg.

As earlier reported, DLS and the Tezos Foundation were facing 4 class action lawsuits after their ICO raised $232 million in the year 2017 and was later indicted of trading unregistered securities to new investors in the United States.

According to the docket report named “In Re Tezos Securities Hearings,” the class action court cases have now been merged into one with Arman Anvari as the lead plaintiff.

According to Judge Richard Seeborg’s order, the Brietmans are arguing in their motion that the ICO was managed by the Tezos Foundation based in Switzerland so therefore, the DLS and the couple should not be liable.

Though, the judge stated that the participation of DLS “in aiding and establishing the Tezos Foundation made the two entities to become deeply entwined, if not functionally exchangeable, during the course of the ICO process.”

The defendants also disputed as part of their motion to discharge, that the lawsuits intentions were to try and use U.S. securities regulations to oversee an ICO for which “vital facets of the sale happened outside the United States.”

The judge replied in the order that the truths of the ICO dealings “belie” such a supposition, arguing:

“Anvari partook in the deal from the U.S. He did that via a collaborating website which was: (a) hosted on an Arizona server and; (b) was run largely by Arthur Breitman within California. He apparently learned what he needed to learn of the ICO and took part in response to advertising that almost completely targeted the residents of the United States.”

Distinctly, the court approved the motion and discharged Bitcoin Suisse, a cryptocurrency brokerage company as the defendant, “Furthermore, Bitcoin Suisse doesn’t appear to be a significant player in this action.”

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