The authors of digital token Tezos accuse a Swiss partner of enriching himself from $232 million from an initial coin offering. A well-known figure in Switzerland's crypto valley, he isn't taking it lying down.

This week, infighting between the French-American couple behind digital currency Tezos and the head of a Swiss-based foundation set up to fund it emerged into public view.

Kathleen and Arthur Breitman, the authors and developers of the «Tezzie» currency, levied accusations of enrichment at the head of a Swiss foundation which raised $232 million this summer.

The foundation head, Johann Gevers, is a well-known cryptovalley figure who is trying to get his own digital currency, Monetas, off the ground. The South Africa-born Gevers is also a co-founder of the Swiss Bitcoin Association and a driving force behind Crypto Valley, a Swiss organization for digital currency providers.

«Utterly False Stories»

Overnight, Gevers denied the allegations in an email to finews.com. «The stories that are being spread are utterly false.» The Breitmans said Gevers had sought to pocket a bonus from the ICO proceeds, whose value had swollen to as much as $400 million because of a rise in the value of bitcoin, and then lied about it to his foundation colleagues.

For his part, Gevers said he paid the 50,000 Swiss franc fee to set up the foundation out-of-pocket, and threw in «a very large further amount to the foundation» which he didn't specify. All told, Gevers claims he is one of the largest contributors in the Tezos ICO. He didn't directly address the Breitman's allegations that he subsequently sought to take money out as a bonus.

Overnight, Kathleen Breitman specified the accusations. She told «Fortune» that Gevers tried to pressure the other two foundation members, Diego Ponz and Guido Schmitz-Krummacher, into a bonus worth $1.5 million at the time based on the Tezzie's valuation, but «misrepresented this as being worth only $300,000.»

Bern Unequipped

Gevers also says he brought «many millions of dollars in further contributions» to Tezos from his network, including ultra-high net worth individuals. The fight has broken down into a public tit-for-tat between the Breitmans and Gevers that is for Bern's regulators – and probably lawyers – to resolve. Both parties seem to have reported the other to Switzerland's supervisor of foundations, which officially regulates Tezos. 

In July, Gevers gained sole signatory authority over the foundation – not unusual given his role as head – according to Switzerland's commercial register. In August, the foundation changed its address from a business controlled by Schmitz-Krummacher to one in Zug which also houses Monetas, Gevers' firm – also common practice for Swiss foundations. The Breitmans claim Gevers has been suspended as Tezos foundation head by Ponz and Schmitz-Krummacher. 

The spat over Tezos' crypto millions highlights how Switzerland is woefully unequipped to deal with the crypto gold rush. Foundations are normally set up along religious or charitable aims, but many digital token providers including ethereum have made use of the unique structure, in part because it is light-tough regulation.

What Next?

The toothless supervisor would normally not take a closer look at the foundations it oversees until the first year's business reports have been deposited, except in cases of irregularities or wrong-doing. 

Swiss financial regulator Finma doesn't oversee any foundations, but the crypto rush clearly pushes into its regulatory purview with currency regulation, banking law, stock market rules and even fund regulation. The regulator said last month last month it is «investigating a number of ICO cases,» without commenting on Tezos.

What now? For one, the Tezzie's development has been pushed back, the Breitmans said this week; the spat is sure to absorb precious management resources – and money. The Tezos foundation can dump Gevers if it follows procedure, but it is unclear whether Ponz and Schmitz-Krummacher, who have remained silent, want to do so. Gevers maintains he is being smeared with «dishonest, immoral, and destructive behavior of certain parties» – apparently referring to Kathleen and Arthur Breitman, without naming them.

Gevers says he continues to believe the Tezzie will become a great success story, and that the current issues can be resolved. «But this will require cool heads and rational behavior in the interest of the Tezos project, not ego-driven emotional reactiveness.»