Over two dozen former staff of Ethereum infrastructure agency Consensys have filed a recent lawsuit in opposition to the agency’s founder and CEO, Joseph Lubin, over claims he diluted employee equity shares in opposition to earlier guarantees.
The former staff allege that Lubin — who can also be a co-founder of Ethereum — breached this “no-dilution promise” made in 2015, according to the plaintiff’s Oct. 19 submitting within the Supreme Court of the State of New York.
The plaintiffs allege Lubin lured in “smart and motivated” colleagues to work for Consensys in late 2014, claiming the agency would grow to be the “future of cryptocurrency” and the “crypto Google.”
Around that point, Lubin allegedly said in a doc that he wouldn’t dilute employee equity shares; the plaintiffs allege he later broke that promise.
“It is my intention that the percentage Consensys members receive will not be diluted by additional issuance,” the doc reportedly said.
The plaintiffs argued Lubin didn’t simply break the promise but in addition “got rich” off it whereas they “got nothing.”
“He broke his word [and] he violated his legal commitments and duties. While Lubin got rich, Plaintiffs got nothing.”
The plaintiffs, who held shares in Swiss-based holding firm Consensys AG — previously Consensys Mesh — declare the shares have been rendered “worthless” when Lubin transferred cryptocurrency wallet MetaMask and different belongings to its new United States-based entity in 2020.
The plaintiffs additionally named funding financial institution JPMorgan as one of many seven defendants, alleging it ”performed a pivotal position” in negotiating the asset switch and have become a brand new equity holder within the new U.S. entity:
“Lubin, his inner circle, and JPMorgan kept the details of the negotiations secret—Plaintiffs were left in the dark.
“Lubin did not bring over many of his early employees—the Plaintiffs here—as equity holders in the new company. Instead, they continued to hold shares in the far less valuable entity that had been stripped of its assets,” the plaintiffs added.
Consensys says plaintiffs claims are “meritless”
Speaking to Cointelegraph, a Consensys spokesperson referred to as the claims “frivolous,” saying the plaintiffs at the moment are attempting their luck within the U.S. authorized enviornment after “two years of getting nowhere with their frivolous claims” in a Swiss court docket.
“[The] plaintiffs now believe their meritless claims stand a better chance of yielding a payday if they game U.S. courts and entangle Consensys Software and other unrelated parties in litigation.” The Consensys consultant added:
“We fully expect that the plaintiffs, who were never employees of Consensys Software, will soon find this gambit is another fruitless attempt to enrich themselves from the success of others.”
Despite claims that the plaintiff’s authorized problem went “nowhere” in Switzerland, the nation’s High Court of Zug issued a judgment in favor of the plaintiffs.
The plaintiffs say the ruling helps their place that Lubin breached his duties.
Consensys was based in October 2014, about 9 months earlier than the Ethereum blockchain launched in mid-2015.
The agency develops and hosts infrastructure tasks that underpin a lot of the Ethereum community.
The plaintiffs are looking for damages throughout six separate causes of motion, in an quantity to be decided at trial.