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Tezos: Governance in the Cryptocurrency ...

Barua, Samir K., V...

Case

Tezos: Governance in the Cryptocurrency World

Barua, Samir K.; Varma, Jayanth R.

IIMA-FA0549 | Published January 20, 2020 | 17 pages Case

Collection: Indian Institute of Management, Ahmedabad

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Learning Objectives

In November 2017, Arthur and Kathleen Breitman, the founders of Tezos, confronted a governance crisis that threatened to destroy their project and expose them to serious legal risks. All developmental activities in Tezos were stalled after Breitmans lost access to the funds raised through an initial coin offering (ICO) four months earlier. Moreover, a series of class-action lawsuits in the United States alleged that the USD 230 million ICO of July was an illegal security offering. The case provides a fascinating situation for discussions on the principles and the frameworks for governance.

Understand why the most corporate governance Principal-Agent framework is difficult to apply in the context of two disparate and yet connected entities. Examine the applicability if much broader governance frameworks based on Relational Model Theory (RMT) and Social Network Theory (SNT). Use the RMT/SNT frameworks to understand the governance of cryptocurrencies and other virtual decentralized organizations. Provides an opportunity for students to put themselves in the shoes of the protagonists and decide on the course of action in the face of a complex governance crisis.