Tezos Foundation President To “Step Back … As Soon As Things Are On Track”
by Fintechnews Switzerland January 31, 2018Johann Gevers, the president of the Tezos Foundation, has committed to “step back” from his role once the project is back on track with a new board.
The statement comes after months of tensions and public feud with the project’s founders.
Blockchain project Tezos raised more than US$230 million in July 2017 in one of the year’s most successful initial coin offerings (ICOs). But the project was quickly derailed by quarreling between founders Arthur and Kathleen Breitman, who control the code, and the Tezos Foundation, which controls the funds.
Meltem Demirors (left), Arthur Breitman (center) and Kathleen Breitman (right), Money 20/20 Conference at The Venetian in Las Vegas, NV, October 24, 2017. (Photo Credit: Insider Images)
The feud between Gevers and the Breitmans dates back to October 2017 and became public when the couple demanded that Gevers step down as the president of the foundation. The Breitmans had initially hired Gevers to help set up the Tezos Foundation and manage the ICO as well as the project funding.
Responding to the move, Gevers stated that “the Breitmans have attempted to bypass the Swiss legal structure and take over control of the foundation, and have acted destructively, causing months of delays in the Tezos project,” according to a Wall Street Journal article.
The Breitmans fired back, accusing Gevers of sabotaging the project and mishandling funds for self-gain. Kathleen Breitman wrote in an email quoted by Fortune:
“Gevers has acted as a roadblock to the mission of the Foundation—to launch the Tezos network and support the Tezos ecosystem. Johann consistently failed to meet deadlines, was unwilling to hold or attend council meetings, and failed to hire employees to help launch the network or pay people he committed to paying, and was constantly unavailable to handle foundation matters…
“Johann attempted to pressure the other members of the foundation council to award him a contract that would, among other things, grant himself a bonus worth US$1.5 million at then-current valuation of the Tezos token. He misrepresented this as being worth only US$300,000. After Arthur and Kathleen brought this behavior and a number of other issues to the attention of the council, the Tezos Foundation suspended Johann from his operational role.”
Tezos Foundation board member Guido Schmitz-Krummacher resigned from the Tezos Foundation in December because of the conflict.
In his first interview since stepping down from the three-member board, Schmitz-Krummacher blamed the project’s creators for delays in writing computer code and setting up infrastructure that would allow the cryptocurrency to launch.
Siding with Gevers, Schmitz-Krummacher told Reuters:
“Until today, I do not have any result which substantiates or supports the accusations made in the letter in such a way that it would provide – according to the legal rules for foundations – an important reason for dismissing Johann Gevers. The results didn’t please the Breitmans and, on that basis, they tried in various ways to threaten me and put me under pressure.”
Meanwhile, some Tezos supporters have attacked Gevers on social media and demanded his departure from the foundation.
“We are gravely concerned about Mr. Johann Gevers and his failure to realize the purpose of the Tezos Foundations,” read an online petition released by a group of contributors in December.
Controversial ICO
Since the ICO ended, Tezos has been slapped with at least six class-action lawsuits, many of which charge Tezos with violating federal security law as well as defrauding and misleading contributors.
Although structured as donations for a technology project, some contributors believed they were investing in an asset similar to Bitcoin.
One lawsuit alleges that contributors to the fundraiser were not told that it could take more than three years for the Swiss foundation, which holds the funds to purchase Dynamic Ledger Solutions, the Breitmans’ Delaware-based company, and the project’s source code. This time frame was not disclosed to investors, the lawsuit alleges.
Contributors have still not received any Tezzies.
Moving forward
The Tezos Foundation regained access to banking services in December 2017 after its accounts were frozen for two months. This has allowed it to pay creditors and software developers again, Gevers said in a blog post on Sunday, which was removed on Monday for “prudential reasons.” The foundation has also made progress in recruiting a new law firm and is working on finding an accounting firm.
“I have consistently communicated … my intention to honor [my] commitments, and 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.
The foundation is now focusing on building a full-time operational team. It has recruited an interim executive to set up basic operations while it looks for a long-term CEO.
Featured image: Johann Gevers, May 2016, via Monetas.
