An unending drama from Tezos just keeps rolling. A top attorney in the cryptocurrency space, formerly involved with conceptualizing the Tezos Foundation, has released a severe warning for those who wish to toy with the never ending initial coin offering (ICO) market.
Dr. Luka Muller, partner at Switzerland and Crypto Valley based law firm MME, can be looked upon as that person with rare abilities; an expert on initial coin offerings (ICOs). The firm counts Ethereum, Bancor and the ill-fated Tezos Foundation among its clients. When he speaks, it’s in all probability an excellent idea for those wishing to take part in any future ICOs to listen.
“The Swiss foundation for all intents and purposes is a very old, inflexible and stupid model,” Dr. Müller told Reuters. “The foundation is not intended for operations. As a user, you must be absolutely certain and bear the consequences that if you have ether or Bitcoin and it does not work, you have nobody to claim against,” he insisted.
News.Bitcoin.com lately revealed how Tezos’ troubles are sending the entire crypto community in revolt. Notably two weeks before Christmas, its top board members resigned. Weeks preceding to that, legal charges were levied on the company stemming from its ICO lawsuits. Evidently, its policies need thoughtful reassessment.
The foundation concept is to bear a non-profit status, list investments as donations, particularly for tech-involved projects that might require development. Dr. Müller advocates building a corporate structure as a replacement for a foundation for companies dealing in cryptos.
“If you structure your token sale in a manner that it would appear like a preliminary public offering, then even if you launch a blockchain protocol, the foundation is perchance not suitable. If it is more an investor background instead of a technical environment, do all the registrations. If you desire to sell it or want to be active in promoting it in the US, apply U.S. laws.”
Tezos was able to obtain a quarter billion USD during its ICO in a year that saw over 5 billion USD in Initial Coin Offerings across the board. Switzerland single-handedly held over 600 million USD in ICO projects which shows that its professional financial sector is among the most proficient the world over, thus the reason why it is extensively sought after in crypto related consultations.
Dr. Müller’s foundation concept was to allocate funds explicitly, shielding developers at the end of the day in terms of liability. “It’s a notion of a donation, from which it is clear you donate. You contribute into a structure and you donate to a team and to their idea,” he explained.
Without liability, it’s possibly harder to find a counterpart to hold accountable, especially in terms of lawsuits. Instead, going forward ICOs should embroil themselves in Gesellschaft mit beschränkter Haftung (Gmbh), a Northern European variant on limited liability corporations, LLCs in the United States, or even an Aktiengesellschaft (AG), he recommends. An AG is basically a corporation that apportions shares.