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Blockchain project Tezos hit with lawsuit

Illustration: Greg Ruben / Axios

A class-action lawsuit was filed last week against the founders of Tezos, a blockchain project, over its July initial coin offering (ICO), alleging they violated securities laws and defrauded participants in the fundraise. The lawsuit comes just days after Tezos' founders revealed a dispute with the Swiss foundation set up to manage the funds it raised. The project is also significantly delayed from the original timeline shared with investors.

Why it matters: Regulators have been cautiously examining ICOs and issuing warnings to the industry precisely to avoid such situations in which investors could feel misled. Tezos's ICO is one of the largest thus far, raising over $230 million at the time (now worth about twice as much), which will surely be watched closely by regulators.