The Tezos Foundation has agreed to pay $25 million in damages to plaintiffs and holders of the coin who made losses on their investment.
According to a court filing made last week, the lawsuit against Tezos dating back to its illegal securities sale in 2017 has settled in favor of investors.
The project’s founders Arthur and Kathleen Breitman have agreed to pay $25 million in damages to plaintiffs, which will be distributed to token holders who made a loss on XTZ. The proposal was first made in March of this year but only recently settled.
Per the court document, lead plaintiff Trigon Trading and other key figures in the suit are entitled to settlements of $5,000 and $7,500 while the plaintiff’s lawyers will receive more than $8 million in legal fees.
The remaining $16.5 million will be distributed to XTZ investors who participated in the token sale and generated a loss. Investors who made a profit following the token sale are not eligible for a settlement.
Tezos raised more than $232 million in its token sale in July 2017 through the issuance of the XTZ governance token. It was considered the largest initial coin offering (ICO) at the time.
However, a subsequent review by investors claimed the token constituted an unregistered security, and therefore could not be sold to US clients. According to court filings, investors argued the Tezos Foundation had deceptively marketed the token sale as an equity investment.
Featured Image Credit: Photo via Pixabay.com