The Tezos Foundation, the group behind the troubled $233 million initial coin offering of Tezos tokens in 2017, has agreed to settle a lawsuit filed by investors for $25 million.

The lawsuit alleged that the Tezos ICO breached U.S. securities laws by offering an unregistered security. Although lawsuits making the allegation are usually filed by the U.S. Securities and Exchange Commission, the SEC, at least to date, has never taken legal action against the Tezos Foundation.

The class-action lawsuit, filed in 2017, alleged that in addition to breaching U.S. securities law, the defendants fraudulently and deceptively marketing the sale of tokens as equity investments when they were instead filed as charitable contributions, allowing the defendants to pocket “tens of millions of dollars” for themselves.

Per the terms of the settlement, which still needs to be approved by the California state and federal courts, the Tezos Foundation is not admitting guilt.

“The Tezos Foundation chose to settle all claims because the Tezos Foundation believes it is in the best interest of the Tezos project and community as a whole,” the Tezos Foundation said in a statement Friday. “The Foundation continues to believe the lawsuits were meritless and continues to deny any wrongdoing. However, lawsuits are expensive and time-consuming and it was decided that the one-time financial cost of a settlement was preferable to the distractions and legal costs associated with continuing to fight in the courts.”

The Tezos ICO was troubled from early on. In October 2017 it was reported that Tezos was imploding as the founders of the code behind the token declared war on the Tezos Foundation set up to manage it. The row involved Arthur and Kathleen Breitman of Dynamic Ledger Solutions Inc., the company that developed the Tezos code, and Johann Gevers, the then president of the Switzerland-based Tezos Foundation.

Gevers, along with Diego Olivier Fernandez Pons, both stepped down from the Tezos Foundation in February 2018 in an effort to put Tezos back on track.

Despite its troubles, Tezos has found a willing audience. According to Coinmarketcap, Tezos is the 10th most popular cryptocurrency by market capitalization, with a total value of $116 million, roughly half of its ICO price.

Image: Tezos