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Former ConsenSys AG Workers Initiate Legal Action Over Equity Dispute With Founder Joseph Lubin in U.S.

Police & Regulations
Oct 25, 2023 at 08:43 am

A legal dispute that originated in Switzerland between former employees of ConsenSys AG and the company's founder, Joseph Lubin, has now extended to the U.S. legal jurisdiction.

A group comprising 27 former employees, individuals who had joined ConsenSys during its early developmental stages, allege that their rightful equity stakes in the company were unjustly stripped away. Their claim is rooted in the accusation that Joseph Lubin, a co-founder of the Ethereum blockchain, in conjunction with JPMorgan, executed a sequence of corporate transactions. These maneuvers facilitated the transfer of vital assets from the original Swiss version of ConsenSys to an American entity established in 2020. These allegations have been formally documented in a lawsuit filed in the Supreme Court of the State of New York.

The lawsuit argues that Lubin effectively divested ConsenSys AG, also recognized as Mesh, of its principal assets, including prominent cryptocurrency wallet provider MetaMask. These assets were subsequently transferred to ConsenSys Software Inc. (CSI), an entity incorporated in Delaware. A critical aspect of the employees' grievance is that they were not included as equity holders in this transition, contrary to earlier assurances made by Lubin.

The legal filing contends that Lubin had initially pledged equity stakes to these early employees but subsequently reneged on that commitment. It further alleges that Lubin violated his legal obligations and responsibilities, ultimately benefiting himself at the expense of the plaintiffs.

Despite the fact that ConsenSys, headquartered in Brooklyn, successfully raised $726.7 million from investors and achieved a valuation exceeding $7 billion through Ethereum product development, the former employees assert that they were left with assets that are essentially devoid of value. Their argument highlights the injustice of being deprived of the opportunity to share in ConsenSys's accomplishments, given their significant contributions as early employees, their assumption of higher risks, and receipt of lower salaries.

ConsenSys, based in the United States, has refuted these allegations, describing them as groundless and without merit. They assert that after two years of pursuing baseless claims against ConsenSys Mesh in a Swiss court, the plaintiffs are now attempting to exploit U.S. legal channels to secure financial compensation. The company maintains that the plaintiffs were never employees of ConsenSys Software and argues that this legal action is an unproductive attempt to profit from the successes of others.

JPMorgan has opted not to comment on the matter through its spokesperson.

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