Bitcoin Brokerage Denies Tezos ICO Involvement in Court Filing

Bitcoin Suisse AG, a cryptocurrency brokerage listed as a defendant in a lawsuit against Tezos, has filed a motion to dismiss the case against it.

May 22, 2018 at 8:00 a.m. UTC
Updated Sep 13, 2021 at 7:58 a.m. UTC

Cryptocurrency brokerage Bitcoin Suisse AG has filed a motion to dismiss its involvement in a class-action lawsuit launched against the Tezos Foundation and other entities, saying it had nothing to do with the startup’s 2017 initial coin offering (ICO).

In a filing entered last week at the U.S. District Court in the Northern District of California, the brokerage stated that, while it provided blockchain project Tezos with some cryptocurrency conversion services, its actions should not be grouped with those of the company as regards the claims in the lawsuit being brought by Tezos investor Bruce MacDonald.

The filing states:

“Bitcoin Suisse submits that it is not properly named as a defendant in the Tezos litigation because of its lack of contacts with both California and the United States sufficient to establish personal jurisdiction and because the alleged, limited currency conversion services it provided, solely in Switzerland, prior to the alleged Tezos ICO, and its alleged post-ICO conduct, cannot establish liability under Sections 5 and 12(a)(1) of the Securities Act.”

As previously reported by CoinDesk, MacDonald's December 2017 complaint alleges that Tezos violated U.S. securities laws in the sale of its token. Previous lawsuits filed in relation to the ICO also contained allegations of securities law violations, as well as investor fraud.

In its motion, Bitcoin Suisse further distanced itself from Tezos, stating that the plaintiff failed to connect the two organizations in the lawsuit. As such, it claims that the court does not have jurisdiction over Bitcoin Suisse AG and therefore it should not be involved in the action.

Bitcoin Suisse also claims that MacDonald did not even specify a particular grievance against it, writing, "To assert a claim under Section 12(a)(1) of the Securities Act, a plaintiff must allege that defendant offered or sold a security in violation of 15 U.S.C. § 77e to the plaintiff."

However, it continues, "Here, Plaintiff has failed to sufficiently allege: that Bitcoin Suisse offered or sold a security in connection with the Tezos ICO; and that Plaintiff purchased a security from Bitcoin Suisse in connection with the Tezos ICO."

In supporting this argument, Bitcoin Suisse states that it did not offer or sell securities. A hearing about the filing will likely not be held until July 19, according to the document.

Tezos completed its initial coin offering in July of last year, bringing in a record-breaking $232 million-worth (at the time) of bitcoin and ether.

Law image via Shutterstock

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