Surprise KYC: Investors in Tezos' Troubled ICO Might Finally Be Fed Up

Published on by Coindesk | Published on

Mentioned in this article
On Sunday, the Tezos Foundation announced that it would be carrying out know-your-customer and anti-money laundering checks on investors who bought into its July 2017 initial coin offering.

At that time, investors, who the foundation calls "Contributors," were not asked to provide any personally identifiable information when they bought $232 million worth of its crypto tokens - dubbed tezzies - making Tezos the largest ICO ever completed up to that point.

As the blockchain industry has matured, "It has become best practice to verify that contributors meet basic KYC/AML criteria," the Tezos Foundation announcement said.

Part of the frustration is likely that this is just the latest obstacle standing between Tezos investors and their tokens.

The blockchain launch, which would unlock the tokens for investors, was delayed for months after a spat between Tezos' founders, Arthur and Kathleen Breitman, and Tezos Foundation president Johann Gevers broke out less than three months after the ICO. Yet, even after the Breitmans' seeming victory, with Gevers stepping down from the foundation in February, there wasn't an immediate launch of the blockchain.

Although Tezos' current timeline for the beta launch is set by the end of the second quarter 2018, with the new KYC/AML process, some investors who are unable to complete the verification or refuse to now worry the won't ever receive their tezzies.

CoinDesk reached out to the Tezos Foundation asking about refunds of investors' bitcoin and ether, but did not receive a clear response.

The ICO's terms state that contributions were not investments, but actually "Non-refundable donation[s]." The terms further warn of regulatory risk, and even state, "The contributor understands and accepts that TEZOS cannot guarantee that contributors shall have any allocation of XTZ when the TEZOS Network is created."

Those terms might worry many investors and outside observers, but apparent differences of opinion among the Tezos ranks could also cause anxiety.

A developer going by the name yellow snake has set up a website and social media channels for nTezos, which the group describes as an "Instantiation of Tezos" that is independent from the foundation and is instead self-governed, with no KYC/AML checks.

x