USD 200+ Mio raised under Swiss “Non-Profit/Charity” umbrella. Largest ICO ever!
This morning we have seen multiple posts about the Tezos ICO, which started July 1st. So far USD 200+ Mio has been raised, and there is still time to sign.
With more than 8 days left, 208 Mio USD worth has been “contributed.” There is no cap set on this ICO !
This ICO is rather unusual in a few regards.
It seems first and foremost the payout for the founders of Dynamic Ledger Solutions, Inc., which get 8.5% of the fiat proceeds in cash in addition to 10% of the tokens (FIRST EVER payout to our knowledge).
The fine print of the offering can be found on the web page of the Tezos Foundation. TRANSPARENCY MEMO
Background on DLS and the Tezos Foundation “Dynamic Ledger Solutions, Inc. (DLS) is a US-based company currently controlled by its founders, Kathleen & Arthur Breitman. It owns all of the Tezos-related intellectual property (IP), including the source code of the Tezos cryptographic ledger, logos, and trademark applications associated with the name Tezos, domain names, and goodwill arising from a set of relationships with several contractors and potential customers in the financial technology market”.
Contractual Agreement & Risk Mitigation The Foundation and DLS have negotiated a contractual agreement in which the Foundation will acquire DLS and release its IP under a free software license (MIT license). In the process, the Foundation will also acquire DLS’ existing business relationships with contractors and potential customers, as well as its trademark applications and domain names. This transaction is structured as an earn-out, which means the price paid will depend on future performance metrics. Earnouts are common in corporate acquisitions in order to limit risks for buyers.
DLS has taken proactive steps to limit the Foundation’s risk in this acquisition, specifically:
- The Tezos blockchain must launch and operate successfully as a public blockchain for a period of three months before DLS’ shareholders can receive any compensation for their shares.
- It must work substantially as described in our white paper and technical papers and be consistent with the features described to the community prior to the fundraiser.
Only at this point, and not before, DLS shareholders may exercise the right to receive payment for their shares
All is happening through the Tezos Foundation, located in Zug, Switzerland and supposedly approved by the “Swiss Foundation Supervisory Authority.”
Who is the Swiss Foundation Supervisory Authority? Sounds very official and close to Swiss Financial Market Supervisory Authority (FINMA), but it is not. The Swiss Foundation Supervisory Authority oversees Charitable Foundations. Eidgenössische Stiftungsaufsicht is part of the “The Federal Department of Home Affairs” and not the “The Federal Department of Finance.”
Further, has The Swiss Foundation Supervisory Authority not taken the supervisory role over Tezos as of yet. It is still with the Canton of Zug.
In other words, a quick and rather smooth payout of the founders. Seems to go much easier in Switzerland under.“Foundation Law” than in the US, where Dynamic Ledger Solution is based. We do not believe there will be any job creation in Switzerland as all employees of DLS will remain in the US.
Corporate acquisitions with Charitable Foundation in Switzerland! We see a reputation risk for Switzerland, should this turn sour in any way.