In a new development, Ethereum co-founder Joseph Lubin is being investigated by the FBI for potential difficulties with equity pledges tied to his blockchain technology company, ConsenSys.
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ConsenSys, which was reportedly valued at around $7 billion, is at the center of these allegations. The company, which has been instrumental in various blockchain advancements, is currently embroiled in a whirlwind of allegations, the most of which are on equity pledges and asset transfers.
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Complaints And Alleged Equity Violations
Over twenty former workers have filed a lawsuit against Lubin, alleging that the Ethereum co-founder organized a sophisticated asset transfer within ConsenSys’ holding structure.
The group alleged that key assets, including the well-known web3 wallet MetaMask, were purposefully shifted out of the Swiss-based ConsenSys AG, effectively rendering their shares worthless.
These claims, according to the study, paint a picture of deliberate manipulation in which Lubin, aided by ConsenSys General Counsel Matt Corva, allegedly moved these assets to a new US-centric business entitled ConsenSys Software Inc (CSI) in 2020. According to the report, the stated goal of this measure was to attract external investment.
Furthermore, investment banking behemoth JPMorgan is said to have played a part, selling a 10% interest in CSI for its blockchain venture, Quorum. Corva and Umar Farooq, JPMorgan’s Global Head of Blockchain, are also named as co-defendants in the action.
It is important to note that historical commitments are at the center of this debate. When Lubin founded ConsenSys in 2014, a large number of employees apparently chose lower pay in exchange for the prospect of company shares.
These stock obligations are said to account for 30% of the company’s holdings. According to reports, the plaintiffs in this litigation possess around 9% of this pledged equity tranche. The lawyers made the following observations:
He broke his word. In the process, he violated his legal commitments and duties. While Lubin got rich, plaintiffs got nothing.
ConsenSys’ Reaction and Next Steps
A spokeswoman for ConsenSys responded to the case, highlighting that the plaintiffs are now attempting to gain favorable outcomes through the US legal system after failing in a Swiss court for two years.
Plaintiffs in an ongoing shareholder case against the Swiss-based web3 incubator and investor Consensys AG, which operates as Consensys Mesh, have just filed suit against U.S. blockchain software developer Consensys Software Inc. in New York state court.
The representative went on to describe this move as a “gambit” aimed at profiting from the success of others.
While this unfolding tale unfolds, the Ethereum market has shown a bullish trend, rising 2.5% in the last day to trade at $1,609.
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