Home News Tim Draper-Backed Tezos Foundation Implements KYC/AML Guidelines, Investors Unhappy

Tim Draper-Backed Tezos Foundation Implements KYC/AML Guidelines, Investors Unhappy

June 11, 2018 17:49
Share with your friends

Back in April, Tim Draper made a brief foray into our collective consciousness, when he called out the Indian government for instructing banks to stop working with cryptocurrency exchanges.

Lately, it seems all’s not well in Draper’s paradise, Tezos either. Allegations of scams seem to have hit the brand hard. Although Tezos held its Initial Coin Offering (ICO) in 2017, after that it has not been a smooth ride for the company.

In November 2017, Tezos faced the first of its many class action lawsuits. The class action suit was filed in California by attorney James Taylor-Copeland on behalf of investors. The suit had alleged that Tezos violated US Securities Law by offering securities, while at the same time “misleading” investors regarding the nature of the company.

According to the news website CoinTelegraph, Tim Draper had said, “There was nothing secretive about our purchase of Tezos. We invested for ownership in the company, which at the time was two bright young people and an idea. The sale might not have happened at all! We also participated in the Pre-sale. Most ICO founders earn tokens over time. All tokens we hope to receive that we didn’t buy in the Pre-sale (alongside with all the other investors who participated) will vest over time with the founders’ tokens. I have no intention of selling these tokens because I am a true believer in the Tezos mission: to build a Blockchain on proof of stake and open it up for developers to build and invent on a new and more relevant platform.”

On Monday, Tezos invited fresh controversy when the foundation announced that it was laying down some KYC/AML guidelines. It said, “The Tezos Foundation would like to announce the implementation, at this time, of Know Your Customer / Anti-Money Laundering (“KYC/AML”) checks for contributors.”

It added, “The Foundation values and respects the privacy of its contributors, and along with countless others around the world, it opposes the unnecessary collection of personal information that has become pervasive on the Internet. However, it is important to comply with a rapidly evolving regulatory landscape. To that end, performing KYC/AML checks – as has become the norm for blockchain projects – is the best way forward.”

The Foundation said it would be working with a third-party vendor to conduct all KYC/AML checks.

Needless to say, the community was NOT pleased. Vitalik Buterin, creator of Ethereum said, “This seems backwards. Why can’t third parties just run a script to scan the BTC/ETH blockchains, see how much everyone contributed, calculate how much XTZ everyone should get, and generate the genesis block without Tezos Co involvement? That’s how the Ethereum launch worked.”

Another user said, “What’s next ? Should contributors also submit blood samples ?”

The majority of the commentators seem like they want out. However, only time will tell if Tezos will address these privacy-related concerns.

Liked what you read? Join us on Telegram


Please enter your comment!
Please enter your name here