In a recent turn of events, ethereum co-founder Joseph Lubin is under legal scrutiny for alleged issues in capital pledges related to his blockchain technology company, ConsenSys.
ConsenSys, recently valued at approximately $7 billion, is at the center of these allegations. The company, which has been instrumental in numerous blockchain innovations, is now caught in a maelstrom of accusations, mainly around capital commitments and asset transfers.
Allegations and alleged equity violations
A group of more than twenty former employees filed a lawsuit against Lubin, suggesting that the ethereum co-founder orchestrated a complex transfer of assets within the ConsenSys holding structure.
The group claimed in particular that valuable assets, including the famous web3 MetaMask wallet, were strategically taken out of Switzerland-based ConsenSys AG, leaving its shares virtually worthless.
According to the report, these allegations paint a picture of deliberate manipulation in which Lubin, with the help of ConsenSys general counsel Matt Corva, allegedly transferred these assets to a new US-focused entity called ConsenSys Software Inc (CSI) in 2020. . As revealed in the report, the supposed objective behind this measure was to attract external investors.
Additionally, investment banking giant JPMorgan reportedly played a role, trading its blockchain company, Quorum, for a 10% stake in CSI. Both Corva and JPMorgan’s Global Head of Blockchain Umar Farooq are named co-defendants in the lawsuit.
It is worth noting that historical commitments are at the center of this controversy. When Lubin created ConsenSys in 2014, a significant number of employees reportedly opted for lower salaries, pinning their hopes on the company’s promise of capital.
These equity commitments reportedly amounted to 30% of the company’s holdings. The plaintiffs in this lawsuit are said to own approximately 9% of this tranche of committed capital. The lawyers stated:
He broke his word. In the process he violated his legal commitments and duties. While Lubin got rich, the plaintiffs got nothing.
The ConsenSys Response and the Way Forward
In response to the lawsuit, a ConsenSys spokesperson ethereum-joseph-lubin-consensys-lawsuit” target=”_blank” rel=”noopener nofollow”>revealedunderscoring that the plaintiffs, after two years of unsuccessful claims in a Swiss court, are now attempting to seek favorable outcomes through the US legal system.
Plaintiffs in an ongoing shareholder case against Swiss-based web3 incubator and investor Consensys AG, doing business as Consensys Mesh, have just filed a lawsuit against American blockchain software developer Consensys Software Inc. in New York state court. York.
The spokesperson also described this measure as a mere “gambit” aimed at capitalizing on the success of others.
As this developing story continues to unfold, the ethereum market has shown an uptrend of 2.5% in the last day as it is currently trading at $1,609.
Featured image from Unsplash, chart from TradingView
