Crypto Dark Side: $13 Million Law Suite Filed Against Ethereum Co-founder

By July 23, 2019Ethereum
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Crypto Dark Side $13 Million Law Suite Filed Against Ethereum Co-founder

Joseph Lubin, a very well known personality in the crypto space, the founder of ConsenSys and co-founder of Ethereum, is sued by a former employee, Harrison Hines. The plaintiff who is the founder of the startup Token Foundry, filed a complaint against Lubin in the New York County Supreme Court. According to the official document, Hines is seeking more than $13 million in relief from Lubin for breaching the contract.

In addition to that, unpaid profits and fraud are also the reasons for filing the complaint. In this regard, the document reads:

This is an action for breach of contract, conversion, quantum merit, unjust enrichment, fraud, declaratory judgment and unpaid profits arising from the defendants’ acts in connection with the business known as Token Foundry.

For all the aforementioned violations, the relief sought is well explained in the document as well. While giving a break up of the damages and demanding monetary compensation against those damages, the document clarifies:

The relief sought is monetary damages in the amount of $12,827,000 on the contract, quasi-contract and fraud claims plus $404,783 in unpaid profits.

ConsenSys incubated startup, Token Foundry was launched last year in the month of April. While explaining the significance of tokenization in today’s world, the startup aimed to help the blockchain companies for launching new tokens.

After 4 months of its inception, Hines along many others had to leave the company. The performance of the startup wasn’t over the edge as only four successful sales were made from April till November of the last year. After leaving the Token Foundry, Hines and about five other ConsenSys alums started working at Terminal Systems.

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Even at that time, Hines wasn’t satisfied with Lubin and his way of running things. The experience was so drastic that Hines pledged to never work in a company that was under the control of someone else. At that time, Hines pinpointed the importance of leadership and expressing his experience stated:

Having a good founder/leader who is passionate about the vision and the mission is critical to a startup’s success and keeping the team motivated and together. I’ll never start a company again that someone else has control of.

Token Foundry has been under suspicion for quite awhile as different representatives of the company shared totally different views about the startup. For instance, last year at the event of Crypto Conversations held in Brooklyn, Lubin told Jake Brukhman, founder of CoinFund, that Token Foundry was one of the two top ConsenSys’ 50 projects that were generating substantial money. However, a person with knowledge of internal affairs while staying anonymous gave a completely different scenario and revealed:

They just haven’t killed the brand yet because it’ll be a bad look.

Another source commented:

The company projected revenue of $50 to $100 million for 2018. Based on the sales that they did raise, that is very unlikely.

This shows that problems and various issues did exist in the blockchain-based startup from the beginning and that’s why its employees were not satisfied at all. Now with Hines taking matters to the court, the situation demands an immediate response from Lubin’s side. At the moment, Lubin’s legal representatives have responded to the summon sent by Hine’s lawyer. Moreover, the counsel that might be representing Lubin has been clarified.

It’s hard to anticipate any conclusion as of now because things are very uncertain at the present. Hines had not coped up with the deadline of paperwork submission needed to follow up a formal lawsuit and Lubin has not been transparent about the matter as well. One possibility might be that both parties are preferring to settle the dispute outside the court but until further revelations and discoveries, nothing can be said for sure.

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