The court approved the Swiss-based Tezos Foundation and the project’s founders to pay $25 million in cash on Friday to terminate the three-year-long legal battle against the crypt project’s alleged violation of the U.S. securities law by hosting an unregistered sale in 2017.
Honorable Judge Seeborg decision, which he described as “fair, reasonable, and adequate,” on the controversial lawsuit targeting crypto project, Tezos (XTZ) favors its investors after the foundations’ founder, Arthur and Kathleen Breitman, agreed to pay $25 million for damages - which was initially proposed in March this year - to settle the dispute that lasted for three years. The presiding judge believed that this litigation was “cutting edge litigation” in which novel issues were being litigated, perhaps for the very first time, and those reasons, he approved the Final Settlement Order.
According to Decrypt, the issuance of the funds will be as follows: The Lead Plaintiff Trigon Trading and other key figures will receive a small upfront fee of $5,000 to $7,500 each while the plaintiff’s lawyers will receive over $8 million in legal fees. The allocation of the remaining $16.5 million is set to Tezos investors who participated in the token sale and made a loss. No settlement will be doled to any holders who profited off the sale in the months after. The court said that all parties eligible to partake in the arrangement must file a claim to obtain a share of the stated amount before October 16, 2020.
For those who have no idea, Cointelegraph reports that the suit began in December 2017 when a group of private plaintiffs filed a case against Tezos Foundation and its founders, Kathleen and Arthur Breitman, claiming that the project’s ICO comprised an unlicensed securities offering. However, this arrangement has not ruled on whether the Tezos ICO, as per Coindesk, was an unregistered securities sale.