Initial coin offerings, which are now emerging at a rapid pace, have allowed projects like Tezos to raise millions from investors all over the world. The ‘self-amending’ blockchain project raised $232 million, which makes it the highest funded startup through the process known as the “Initial Coin Offering” (or ICO) in the last year.
But the venture is now facing issues of “mo money, mo problems” because of a dispute amongst Arthur and Kathleen Breitman (the founders of Tezos and owners of the code) against Johann Gevers, president of the Swiss Tezos Foundation which was formed to manage the money raised. This schism is yet to resolve and could cause a delay in the future product launch.
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The dispute occurs against the Swiss foundation when $232 million funds raised through ICO is urged to handle by Johann Gevers. Providentially, the phenomenal growth in the value of bitcoin has certainly boosted Tezos takings. Since the ICO contribution was created from two parts, i.e., ether and bitcoin, it has grown to more than $400 million presently.
According to a recent report by Reuters “the Breitmans demanded Gevers to be removed from the foundation.” They also accused him of “self-dealing’” and misrepresenting a major bonus of $1.5 million that he tried claiming for himself. In contrast, Gevers claimed it was a “character assassination” by the Breitmans and by controlling the foundation as if it is their private entity, they are trying to overstep their legal bounds. Further, Gevers asked to have “substantial role” for the couple but emphasized the independence of the foundation.
Gevers detailed that he has started to sell the cryptocurrency at a rate of around $10 million per week and invest in a ‘diverse portfolio.’ As stated, the dispute will lead to delayed development of Tezos protocol which will impact the token (XTZ) distribution to ICO participants. A post from Arthur Breitman stated that “Our current best estimate for shipping the main net is now February of 2018, though the firm date remains ‘when it’s ready.’”
Furthermore, participants are in worst circumstances of not owning any tokens due to this unexpected dispute. The buyers were informed that the active dealing of Tezos tokens was to be mid-November and proceeded to secondary trading. In addition, one of the future market speculating tools for Tezos, the XTZZ17 futures contracts on the BitMex exchange, has decreased more than 30 percent due to this conflict; the contract depicts the future value of ‘tezzie’ tokens.
Undoubtedly, ICOs have recently seen serious regulatory scrutiny from countries such as China, Singapore, and Switzerland. This is because many ICOs seem unsuccessful and have been called out frequently as scams. Nevertheless, Tezos attracted many investors from the cryptocurrency space, including Tim Draper, who was a significant backer and one of the highest profile bitcoin investors.
The key mission behind Tezos is to create a reliable blockchain more than those that are backed by Bitcoin and Ethereum. It has already attracted a mass audiences and seems to offer something in terms of technology that is different to other blockchains. Law firm Block Leviton LLP have launched an investigation into the affair on behalf of investors, and Tezos’ ICO backers can contact them here.