Over two dozen former employees of Ethereum infrastructure firm Consensys have filed a fresh lawsuit against the firm\u2019s founder and CEO, Joseph Lubin, over claims he diluted employee equity shares against earlier promises.<\/p>\n
The former staff allege that Lubin \u2014 who is also a co-founder of Ethereum \u2014 breached this \u201cno-dilution promise\u201d made in 2015, according<\/a> to the plaintiff\u2019s Oct. 19 filing in the Supreme Court of the State of New York. <\/p>\n The plaintiffs allege Lubin lured in \u201csmart and motivated\u201d colleagues to work for Consensys in late 2014, claiming the firm would become the \u201cfuture of cryptocurrency\u201d and the \u201ccrypto Google.\u201d <\/p>\n Around that time, Lubin allegedly stated in a document that he wouldn\u2019t dilute employee equity shares; the plaintiffs allege he later broke that promise.<\/p>\n \u201cIt is my intention that the percentage Consensys members receive will not be diluted by additional issuance,\u201d the document reportedly stated.<\/p>\n The plaintiffs argued Lubin didn\u2019t just break the promise but also \u201cgot rich\u201d off it while they \u201cgot nothing.\u201d<\/p>\n \u201cHe broke his word [and] he violated his legal commitments and duties. While Lubin got rich, Plaintiffs got nothing.\u201d<\/p><\/blockquote>\n The plaintiffs, who held shares in Swiss-based holding company Consensys AG \u2014 formerly Consensys Mesh \u2014 claim the shares were rendered \u201cworthless\u201d when Lubin transferred cryptocurrency wallet MetaMask<\/a> and other assets to its new United States-based entity in 2020.<\/p>\n The plaintiffs also named investment bank JPMorgan as one of the seven defendants, alleging it \u201dplayed a pivotal role\u201d in negotiating the asset transfer and became a new equity holder in the new U.S. entity:<\/p>\n \u201cLubin, his inner circle, and JPMorgan kept the details of the negotiations secret\u2014Plaintiffs were left in the dark.<\/p><\/blockquote>\n \u201cLubin did not bring over many of his early employees\u2014the Plaintiffs here\u2014as 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,\u201d the plaintiffs added.<\/p>\n Speaking to Cointelegraph, a Consensys spokesperson called the claims \u201cfrivolous,\u201d saying the plaintiffs are now trying their luck in the U.S. legal arena after \u201ctwo years of getting nowhere with their frivolous claims\u201d in a Swiss court.<\/p>\n Related: <\/em><\/strong>Consensys founder \u2018bullish\u2019 on Ethereum following crypto winter performance<\/em><\/strong><\/a><\/p>\n \u201c[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.\u201d The Consensys representative added:<\/p>\n \u201cWe 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.\u201d<\/p><\/blockquote>\n Despite claims that the plaintiff\u2019s legal challenge went \u201cnowhere\u201d in Switzerland, the country\u2019s High Court of Zug issued a judgment in favor of the plaintiffs.<\/p>\n The plaintiffs say the ruling supports their position that Lubin breached his duties.<\/p>\n Consensys was founded in October 2014, about nine months before the\u00a0Ethereum blockchain launched in mid-2015.<\/a> <\/p>\n The firm develops and hosts infrastructure projects that underpin much of the Ethereum network.<\/p>\n The plaintiffs are seeking damages across six separate causes of action, in an amount to be determined at trial.<\/p>\n Magazine: <\/em><\/strong>Joe Lubin: The truth about ETH founders split and \u2018Crypto Google\u2019<\/em><\/strong><\/a><\/p>\n<\/div>\n![\"\"](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-10\/c273d12a-0e36-4f1c-8002-5461c07a60dc.PNG\" "\\"\\"")
Consensys says plaintiffs claims are \u201cmeritless\u201d<\/h3>\n