And then there were two. The historic, crowdfunded initial coin offering (ICO) start-up Tezos raised a quarter billion USD this summer, and to much acclaim. Now it’s embroiled in three class-action suits, its founders vying for control and legal costs. The latest news from the once-seemingly untouchable team is the resignation of Tezos Foundation Board Member Guido Schmitz-Krummacher, leaving a power vacuum and a community clamoring to be made whole.
Tezos Board Must Have Three Members
Kathleen and Arthur Breitman own Dynamic Ledger Solutions, Inc. (DLS), and thereby control the project’s source code. The Foundation, run by the Board, holds the money raised. The Breitmans and Foundation president/founder, Johann Gevers, are currently involved in a battle for control of project’s ultimate direction. At stake are the summer’s funds and the further development of the group’s initial goals.
Reuters reports Mr. Schmitz-Krummacher “resigned because he was frustrated by the infighting, which was consuming a lot of his time.” He’s well known in professional Swiss circles as a straight shooter. He’s Managing Partner of Finances, Legal and Public Relations for Talentory Gmbh. His empty Board seat is effectively the deciding vote between the the Breitmans and Mr. Gevers.
Foundation contributors have yet to receive its proprietary token, Tezzies. Board fighting has pushed the project back beyond its proposed rollouts. At issue is putting the then-quarter of a billion dollars worth of contributions, made in ether and bitcoin, to work on the project proper and, should the Breitmans get their way, to pay ongoing legal expenses. It is worth pointing out both cryptocurrencies have risen in value substantially since Tezos began.
A plot twist involves Foundation bylaws, which state it is Mr. Gevers’ seat which has final say in who fills Mr. Schmitz-Krummacher’s vacancy. And if “the third board member votes against the candidate, Gevers can cast an overriding vote,” according to the report. Neither faction has as of yet taken to the press or the public to make their case.
The Tezos community, however, is anything but passive. A petition alleging improprieties by Mr. Gevers is online, asserting he be removed from the Board as a result. “The community,” the post concludes, “is looking forward to rebuilding confidence in the Foundation upon Mr Gevers’ departure. We trust in the remaining board members to swiftly take the appropriate action for the good of the community and the future of the Tezos project.” At the time of writing, more than 1,000 signatures have been gathered.
Regardless, the Breitmans, code holders, have to worry about no fewer than three legal challenges, including “federal securities law violations and that the fundraiser defrauded participants, who were told they were making non-refundable donations to the foundation. The lawsuits are seeking refunds and damages,” Reuters notes.
What do you think of the Tezos drama? Tell us in the comments!
Images via Hypola, Pixabay.
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Author: C. Edward Kelso