The Tezos Foundation, which raised a historic $250 million in its summer 2017 initial coin offering (ICO), is unraveling amid internal power struggles and legal battles. Reuters reports that board member Guido Schmitz-Krummacher has resigned, citing frustration with the infighting that consumed his time. His departure leaves the foundation’s board with just two members: project founders Kathleen and Arthur Breitman, and foundation president Johann Gevers.
A Decisive Board Seat
The foundation’s bylaws require a three-member board. Gevers holds the power to nominate a replacement for Schmitz-Krummacher. However, if the other board member votes against the nominee, Gevers can cast the overriding vote, effectively controlling the seat. The Breitmans, through their company Dynamic Ledger Solutions (DLS), own the project’s software code, while the foundation controls the ICO proceeds. The two factions disagree on how to use the funds: the Breitmans want to cover mounting legal defense costs, while Gevers prefers directing money toward development.
Legal and Community Backlash
The Breitmans face at least three class-action lawsuits alleging violations of federal securities laws and fraud. Plaintiffs claim the ICO was structured as a non-refundable donation, defrauding participants who expected to receive Tezos tokens (Tezzies) in return. No tokens have been distributed yet, and the project is significantly behind its original roadmap. Meanwhile, an online petition demanding Gevers’ removal has garnered over 1,000 signatures. The community statement reads: “We look forward to rebuilding confidence in the Foundation upon Mr. Gevers’ departure. We trust the remaining board members to act swiftly for the good of the community and the future of Tezos.”
Neither the Breitmans nor Gevers have publicly commented on the allegations. The outcome of this power struggle will determine the fate of one of the largest ICOs in history.