Blockchain / Distributed Ledger

ICO Pioneer Tezos Imperiled By Backroom Power Struggle

Over the summer, a small tech startup named Tezos managed to bring in $232 million online in a wildly successful “initial coin offering.” But, as summer has given way to fall, it seems a backroom brawl over control of the company may be at risk of bringing the whole thing crashing to the ground.

Arthur and Kathleen Breitman — Tezos’ two founders — are now in a fight with Johann Gevers, the president of a Swiss foundation the couple helped establish to handle the coin offering and promote and develop the Tezos computer network.

That foundation, under Swiss law, is supposed to be an independent entity that holds all funds raised by the offering — which, at this point, is around $400 million (contributions were made in bitcoin and have thus appreciated in value along with the cyrptocurrency.)

The Breitmans, who still control the Tezos source code, are seeking to oust the head of the foundation. Through their lawyer, they have written the three-member foundation board looking for Gevers’ prompt removal. They are also looking for scaled-back control for the foundation.

The document accuses Gevers of “self-dealing, self-promotion and conflicts of interest.” Gevers confirms that board members have since requested via email that he step aside for a month while they investigate.

“As Arthur has done to others before me,” Gevers said, “this is attempted character assassination. It’s a long laundry list of misleading statements and outright lies.” He further noted the other two board members “are attempting an illegal coup.”

The Breitmans, according to Gevers, wish to control the foundation as though it were their own entity — by bypassing the foundation’s legal structure and interfering with management and operations.

“They’re unnecessarily putting the project at risk,” he said.

The Breitmans, for their part, reiterated their accusations against Gevers and said they acted “in accordance with all applicable laws and regulations” and that their priority “remains the successful launch of the Tezos network.”

The Tezos digital coins, “Tezzies,” do not yet exist — and they won’t until the Tezos network launches, as that event is what triggers the coins’ release. Until then  — and no date is set — contributors to the fundraiser have nothing. But the offering did make clear that there is no guarantee participants will ever receive a single Tez.

Participants at the outset were warned the project “may be abandoned.”

Gevers says he remains committed to resolving the feud so that “this project succeeds” despite the existent acrimony at present.

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