January 29, 2018 / 6:48 PM / 4 months ago

Tezos funder pledges to 'step back' once crypto-venture's woes are solved

ZURICH (Reuters) - The president of a foundation that controls funding for a cryptocurrency project called Tezos has pledged to “step back” from his role once the project is back on track, after months of dysfunction and public battles with Tezos’ founders.

Photo illustration shows detail of Tezos website, October 10, 2017. REUTERS/Dado Ruvic/Illustration

Tezos raised $232 million in a “initial coin offering” in July, but the project was quickly derailed by disputes between co-founders Arthur and Kathleen Breitman, who control the code, and the Tezos Foundation, which controls the funds.

Having had financial transactions frozen late last year, the foundation has regained access to limited banking services, allowing it to start paying creditors and software developers again, the foundation’s president, Johann Gevers, said in a blog post on Sunday. It has also made progress in recruiting, hired a new law firm and is working on finding an accounting firm.

“I have consistently communicated ... my intention to step back from the Foundation as soon as things are on track with a new board that is independent and has the support of the Tezos community,” Gevers wrote on the site Medium.

Gevers removed the post on Monday for what he called “prudential reasons,” but said in a replacement post that the foundation was following through on the plans he had outlined. Reached by Reuters, Gevers confirmed that he had authored the posts but declined to elaborate.

The Breitmans did not immediately respond to a request for comment.

Gevers’ writings are the latest chapter in a saga that began after July’s controversial coin offering. Although structured as donations for a technology project, some contributors believed they were investing in an asset similar to bitcoin because they were promised coins called “Tezzies.”

Board member Guido Schmitz-Krummacher resigned from the Tezos Foundation in December because of the conflict, and several class action lawsuits have been filed over the offering. Contributors have still not received any Tezzies.

Reuters first detailed the battle between the Breitmans and Gevers in an investigation published last October. (reut.rs/2gPOMNH)

In his post, Gevers said the foundation’s financial service providers froze all of its transactions from October to December, due to what he called a “breakdown of trust.” That made it impossible to pay creditors, he said.

Although Gevers did not say his issues with the Breitmans had been resolved, the foundation was recently able to restore its financial relationships, he wrote. It has also hired an interim executive to oversee operations while it looks for a long-term CEO, Gevers wrote, without naming the executive.

Backroom battle imperils $230 million cryptocurrency ventureRead Reuters investigation of Tezos

Reporting by Brenna Hughes Neghaiwi in Zurich; Additional reporting by Steve Stecklow in New York; Editing by Lauren Tara LaCapra and Rosalba O'Brien

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