The co-founder of Tezos, the cryptocurrency project that made headlines with its $232 million initial coin offering last year, has received a sanction order from a U.S. financial regulator.
According to a report by Reuters, the Financial Industry Regulatory Authority (FINRA) prohibited Arthur Breitman from association with broker-dealers for two years and handed him a $20,000 fine over allegations that he made false statements about the project while employed at investment bank Morgan Stanley. Breitman did not admit or deny the allegations, the report added.
Approved by the U.S. Congress in 2007, FINRA is a self-regulatory body with oversight of dealers and brokers in the country. Breitman was registered with the agency during his employment in Morgan Stanley from 2014 to 2015, Reuters said.
The regulator alleged that Breitman failed to disclose his involvement in developing and pitching for Tezos during his time at the bank, according to the report. He thus violated a rule mandating that registered broker-dealers must to notify employers of side businesses that are expected to bring financial compensation.
Breitman also allegedly provided false information when answering questionnaires from his employer over any outside business activities.
While the report indicated that an attorney for Breitman played down the impact of the sanction on the Tezos blockchain network, it comes at a time when the project is still going through close scrutiny in various legal cases.
Following its record breaking ICO in July of last year, at least four class action suits have emerged since November 2017 against the firm, alleging it violated U.S. laws by issuing tokens that are in effect unregistered securities.