Tezos co-founder hit with ban, $2,000 fine from FINRA

Arthur Breitman, the controversial co-founder of Tezos tech project, is once again in the headlines following reports that he was fined by the Financial Industry Regulatory Authority (FINRA) to the tune of $20,000. This occurred due to the fact that Breitman made a number of false statements regarding his venture whilst he was still an employee of Morgan Stanley. Securities professionals that are registered with the FINRA are required to explain any activity that is carried out for profit that has nothing to do with their employment if this activity results in some sort of compensation.

Breitman, a French citizen registered with FINRA, reportedly started working in the Tezos project between 2014 and 2015, while he’s still employed at Morgan Stanley. A Reuters report published a business plan written by Breitman that listed him as chief executive of the company—which its executives expected to make $20 billion in over 15 years. Additionally, Breitman wrote two papers under the pseudonym L.M. Goodman, an indication that he wanted to hide his connection with the company.

It appears, however, that the Wall Street regulator has already reached an agreement with Breitman over that incident. In its settlement agreement, FINRA said: “Breitman did not notify Morgan Stanley at any time that he was engaging in these outside business activities,” He was fined $20,000 and was also banned from entering into any brokerage dealings for a period of two years.

Breitman did not specifically admit or deny the charges, and his lawyer Sarah Lightdale said, “The settlement with FINRA is unrelated to and has no impact on the launch of the Tezos network. Arthur cooperated fully with FINRA at all times and Arthur is pleased to put this personal matter behind him.”

This is not the first time that Tezos has been involved in conflicts and controversy. The Tezos Foundation allegedly raised $232 million in July 2017 to build a blockchain network for smart contracts. However, none of the cryptocurrency has been delivered as yet due to problems with legal issues and internal conflict at board level. According to reports, there were substantial conflicts between Kathleen and Arthur Breitman and the president of the Tezos Foundation, Johann Gevers, who was also accused of attempting to embezzle funds and hindering the progress of the coin. There were also a number of class action lawsuits brought against the Tezos Foundation from investors as well as accusations of securities fraud and persistent rumours that the SEC would be launching an investigation into the foundation’s operations.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

Tezos project could launch within weeks, co-founder says

If you want something done, do it yourself. That’s a lesson Tezos co-founder Kathleen Breitman has been applying as she prepares to pull the trigger on the release of “Tezzies,” with or without internal support.

The Tezos project has been the stuff afternoon dramas are made of. It has been plagued with litigation, internal strife and broken promises, resulting in a string of delays following its initial coin offering (ICO) last year.  The ICO was one of the biggest seen in 2017, raising about $232 million, and now investors want their money to start earning them returns.

At the recently held UCLA Blockchain Lab Cyber Day conference, Breitman announced that Tezzies could be available in just a few short weeks.

“We plan on releasing the token and going rogue in the next few weeks. We’re able to release the token on our own terms. For a while I felt like I was being ‘gaslit,’ but then I unburdened myself of the morality of it. Things needed to move forward. It’s unfair, but we need to ship the code,” she said.

Despite the positive remarks, Tezos have not gained any traction in the markets. After reaching a high of $10.51 in December, they are now trading at around $2.90.

The infighting is evident everywhere, even on Twitter, where users can choose between three Tezos accounts. The Tezos account has been collecting dust and cobwebs since September of last year, while the Tezos Foundation account, overseen by Tezos President Johann Gevers, and Breitman’s T2 Foundation account have continued to be active. The T2 Foundation account and the Tezos account demonstrate a rift between Gevers and Breitman along with her husband and Tezos co-founder, Arthur Breitman.

Gevers has been extremely polarizing as president of the cryptocurrency network, and at times he has been referred to as a dictator, according to reports. Earlier this year, he announced plans to relaunch the project with an all-Swiss team and he’s holding fast to that rule. Despite receiving numerous requests to join the foundation from highly qualified individuals, Gevers allegedly turned them all down for, to put it simply, not being Swiss.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper. Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Fresh lawsuit seeks to freeze $1B Tezos assets before it fades ‘quickly into the void’

There is no end in sight for blockchain startup Tezos’ legal woes.

A new complaint was filed in the United States last week, asking Californian courts to issue a temporary restraining order on US$1 billion worth of investor assets that Tezos raised during its token sale.

In July, Tezos initiated an initial coin offering (ICO) in which it netted $232 million for a project that promised to deliver an improved version of the Bitcoin blockchain with flexible governance rules. Before the ICO, the team said the Tezos network would be active in November, with a secondary trading happening around the same time.

Neither the promised network nor the coins exist to this day. And investors are claiming that the people behind Tezos have been liquidating the BTC and ethereum—worth an estimated $1.2 billion in today’s trading prices—sitting in a Swiss-based foundation.

Last Dec. 13, law firm Block & Leviton filed a complaint seeking to freeze all the assets of Tezos founders Arthur and Kathleen Breitman, Dynamic Ledger Solutions, Inc., the Tezos Foundation, Johann Gevers, Diefo Ponz and Guido Schmitz-Krummacher “that were collected via or derived from the Tezos ICO,” as well as to stop the defendants from selling, transferring, converting or disposing the ICO proceeds.

Also named in the lawsuit were Swiss crypto financial services firm Bitcoin Suisse, which was recently revealed to have the power to block Tezos Foundation transactions, and its founder, Niklas Nikolajsen.

“The situation regarding the ICO proceeds has deteriorated further, making irreparable looting an imminent prospect,” according to the complaint. “Without immediate judicial intervention, defendants may completely consume the illegally obtained ICO proceeds, leaving plaintiff and the class with no remedy.”

The filing also accused the organizers of the Tezos token sale of violating U.S. securities laws, claiming that the token sale represented an “unqualified and unregistered” sale of “securities.” This is the fourth class-action suit filed against Tezos; the previous complaints accused the project of violating security laws and committing investor fraud.

Then there were two

Around the same time that Block & Leviton is filing their class-action suit in the United States, another trouble is reportedly brewing in Switzerland.

Reuters reported that Schmitz-Krummacher resigned from his post as one of the board members of the Swiss-based Tezos Foundation last week. The Swiss legal and management expert was one of the defendants named in the latest complaint against Tezos.

Tezos is danger of falling apart as its founders battle for the control of the project. The Breitmans were reportedly out to oust Johann Gevers, and Schmitz-Krummacher was “frustrated by the infighting, which was consuming a lot of his time,” according to the news outlet.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Fresh lawsuit seeks to freeze $1B Tezos assets before it fades ‘quickly into the void’

There is no end in sight for blockchain startup Tezos’ legal woes.

A new complaint was filed in the United States last week, asking Californian courts to issue a temporary restraining order on US$1 billion worth of investor assets that Tezos raised during its token sale.

In July, Tezos initiated an initial coin offering (ICO) in which it netted $232 million for a project that promised to deliver an improved version of the Bitcoin blockchain with flexible governance rules. Before the ICO, the team said the Tezos network would be active in November, with a secondary trading happening around the same time.

Neither the promised network nor the coins exist to this day. And investors are claiming that the people behind Tezos have been liquidating the BTC and ethereum—worth an estimated $1.2 billion in today’s trading prices—sitting in a Swiss-based foundation.

Last Dec. 13, law firm Block & Leviton filed a complaint seeking to freeze all the assets of Tezos founders Arthur and Kathleen Breitman, Dynamic Ledger Solutions, Inc., the Tezos Foundation, Johann Gevers, Diefo Ponz and Guido Schmitz-Krummacher “that were collected via or derived from the Tezos ICO,” as well as to stop the defendants from selling, transferring, converting or disposing the ICO proceeds.

Also named in the lawsuit were Swiss crypto financial services firm Bitcoin Suisse, which was recently revealed to have the power to block Tezos Foundation transactions, and its founder, Niklas Nikolajsen.

“The situation regarding the ICO proceeds has deteriorated further, making irreparable looting an imminent prospect,” according to the complaint. “Without immediate judicial intervention, defendants may completely consume the illegally obtained ICO proceeds, leaving plaintiff and the class with no remedy.”

The filing also accused the organizers of the Tezos token sale of violating U.S. securities laws, claiming that the token sale represented an “unqualified and unregistered” sale of “securities.” This is the fourth class-action suit filed against Tezos; the previous complaints accused the project of violating security laws and committing investor fraud.

Then there were two

Around the same time that Block & Leviton is filing their class-action suit in the United States, another trouble is reportedly brewing in Switzerland.

Reuters reported that Schmitz-Krummacher resigned from his post as one of the board members of the Swiss-based Tezos Foundation last week. The Swiss legal and management expert was one of the defendants named in the latest complaint against Tezos.

Tezos is danger of falling apart as its founders battle for the control of the project. The Breitmans were reportedly out to oust Johann Gevers, and Schmitz-Krummacher was “frustrated by the infighting, which was consuming a lot of his time,” according to the news outlet.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

$232 million startup Tezos in legal war with investors, their own president, and possibly the SEC

The fallout could spell an awful precedent for ICO’s.

Blockchain startup Tezos, which raised $232 million in July this year, is now the subject of several lawsuits including one claiming that they broke laws governing unregistered securities outlined by the Securities and Exchange Commission (SEC). If proven, any penalties the SEC will hand down to Tezos could become a precedent that can be used as a weapon to crack down on ICOs.

The company is now worth over $400 million as the cryptocurrencies with which investors bought their shares have already increased in value. Founded by married couple Arthur and Kathleen Breitman around 2014, the project promised to deliver an improved version of the Bitcoin blockchain in terms of flexible governance rules. The company promised to deliver that network two months ago along with corresponding digital coins called “Tezzies” to investors. But to this day, the promised network does not exist, and neither do the coins.

This contradicts Arthur Breitman’s own words. In May, he published a post practically saying the project is close to completion and would be ready in three to four months.

“All of the functionality described in the whitepaper has been implemented to this date, except for gas metering. Most of the remaining work consists in finishing a security addition that we made to the network shell to increase its resilience to DDOS, optimizing smart-contract storage, and — most importantly — testing our network on a large scale and performing external security audits.”

Prior to this, the couple has been embroiled in a nasty public power struggle against their own appointed president, Johann Gevers—who alleges that the couple has been trying to control the foundation and the funds despite not having any formal role in management. The Breitmans have accused Gevers of self-dealing and of trying to dip his hands in the funds for millions of dollars in bonuses, and have been trying to kick him off the position.

As the project has failed to deliver its promises on time, investors have started unleashing a legal battle against the couple. The latest lawsuit claims that the couple has deceptively passed off investor funds as donations, having conveniently conducted the $232 million crowdsale through their Switzerland non-profit entity, Tezos Foundation. It also alleges that the couple has been “pocketing tens of millions of dollars for themselves.”

A report by Reuters says that no refund will be issued to investors, as it was stated in the crowdsale when investors made their “donations.”

$232 million startup Tezos in legal war with investors, their own president, and possibly the SEC

The fallout could spell an awful precedent for ICO’s.

Blockchain startup Tezos, which raised $232 million in July this year, is now the subject of several lawsuits including one claiming that they broke laws governing unregistered securities outlined by the Securities and Exchange Commission (SEC). If proven, any penalties the SEC will hand down to Tezos could become a precedent that can be used as a weapon to crack down on ICOs.

The company is now worth over $400 million as the cryptocurrencies with which investors bought their shares have already increased in value. Founded by married couple Arthur and Kathleen Breitman around 2014, the project promised to deliver an improved version of the Bitcoin blockchain in terms of flexible governance rules. The company promised to deliver that network two months ago along with corresponding digital coins called “Tezzies” to investors. But to this day, the promised network does not exist, and neither do the coins.

This contradicts Arthur Breitman’s own words. In May, he published a post practically saying the project is close to completion and would be ready in three to four months.

“All of the functionality described in the whitepaper has been implemented to this date, except for gas metering. Most of the remaining work consists in finishing a security addition that we made to the network shell to increase its resilience to DDOS, optimizing smart-contract storage, and — most importantly — testing our network on a large scale and performing external security audits.”

Prior to this, the couple has been embroiled in a nasty public power struggle against their own appointed president, Johann Gevers—who alleges that the couple has been trying to control the foundation and the funds despite not having any formal role in management. The Breitmans have accused Gevers of self-dealing and of trying to dip his hands in the funds for millions of dollars in bonuses, and have been trying to kick him off the position.

As the project has failed to deliver its promises on time, investors have started unleashing a legal battle against the couple. The latest lawsuit claims that the couple has deceptively passed off investor funds as donations, having conveniently conducted the $232 million crowdsale through their Switzerland non-profit entity, Tezos Foundation. It also alleges that the couple has been “pocketing tens of millions of dollars for themselves.”

A report by Reuters says that no refund will be issued to investors, as it was stated in the crowdsale when investors made their “donations.”