The group, which claims to represent 35 former employees of ConsenSys AG (CAG), has requested a review under Swiss compliance law to investigate “serious violations” they claim occurred in mid-2020.
CAG, also known as Mesh, is the company behind the leading Ethereum wallet provider MetaMask and was founded by Joseph Lubin, who is also a co-founder of Ethereum.
According to a press release, a group of employees claiming to represent about 50% of all known shareholders sent an application to a Swiss court on March 1.
The group claimed that on August 14, 2020, “the core intellectual property and subsidiaries were illegally transferred” from ConsenSys AG (which is referred to as CAG) to a new entity called “ConsenSys Software Incorporated” (CSI).
The former employees also claim that they and other minority shareholders had no idea about the transfer of intellectual property, and claim that the transaction was executed solely for the benefit of major shareholders and Lubin:
“Joseph Lubin is the majority shareholder in both companies. The transaction was made at the expense of the minority shareholders of CAG and for the personal benefit of Joseph Lubin.
The Washington-based company responded, claiming that the release was the work of an employee.
“He does not refute the allegations on which the lawsuit is based, as well as those contained in a virtually inaccurate press release written by a former employee. He does not look forward to the official dismissal of these allegations in the Swiss courts.”
As part of the agreement, the IP and its subsidiaries were transferred to “ConsenSys Software Incorporated (CSI) in exchange for 10% ownership of CSI and a $39 million loan settlement from founder Joseph Lubin,” according to the allegations.
The agreement is said to have prompted leading traditional financial institutions such as JP Morgan Chase to acquire property in MetaMask and the Ethereum developer platform Ifura. This was at a time when intellectual property was being used as a key card to raise $3 billion in CSI funding in 2021.
ConsenSys said that the transfer of ownership was reasonably valued at the time, and that the situation had changed significantly since mid-2020, which is why the value of the assets increased significantly.
A group of employees is seeking to “return the intellectual property and affiliates of CAG” and are ready to challenge this issue in court to find a solution:
“We will seek justice through the Swiss judicial system. We are not interested in acceptance unless we are ready for the next legal battles,” he added.
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The latest lawsuit against ConsenSys and Lubin comes just months after former general partner (GP) Kavita Gupta sued the New York firm alleging that it did not pay an agreed conversion rate related to a fund it managed in 2017 and 2019.
The dispute has since become a lawsuit and counterclaim, and Consensis responded with a complaint in mid-January. She alleged that Gupta “fraudulently persuaded Consensis to hire her” with false college degrees and work papers.
Gupta Gupta then filed an additional complaint alleging ConsenSys was involved in “fraud, misrepresentation, negligent and unfair enrichment” in relation to the charges against it.
Posting court documents via Twitter on February 3, Compass Mining content director and crypto journalist Will Foxley compared the information exchange to a “National Enquirer article.”