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Bitcoin Mining Giant BitFury is Being Sued By its Former CFO

Bitcoin mining firm BitFury is currently being sued by its former chief financial officer (CFO), according to court documents obtained by CoinDesk.

Dec 4, 2015 at 12:30 p.m. UTC
Updated Sep 14, 2021 at 2:00 p.m. UTC

UPDATE (11th December 4:30 BST): This piece has been updated with a statement from former BitFury CFO Mikhail Golomb.


law, court, gavel

Bitcoin mining firm BitFury is being sued by its former chief financial officer (CFO), according to court documents obtained by CoinDesk.

First filed in April in the Superior Court of California County of San Francisco, former BitFury CFO Mikhail Golomb is alleging he was terminated improperly by BitFury so that the company could avoid awarding him 2% of the business in equity compensation.

Court documents suggest BitFury is currently valued in excess of $500m, meaning the shares are potentially worth $10m.

Further, Golomb asserts that he was denied bonuses, contractual severance and payment for unused vacation time. The former CFO, who earned $240,000 in the position, is seeking a jury trial to obtain damages of up to $10,000 and attorney’s fees as a result of the alleged breach of contract and violations to California Labor Code.

The filing reads:

”Throughout his employment with defendants, plaintiff demanded defendants comply with the Employment Contract and make the required grant of equity to the plaintiff. Defendants terminated plaintiff’s employment in retaliation therefore in order to avoid their obligations to plaintiff under the Employment contract.”

During his time, Golomb served on BitFury’s board of directors and was head of its San Francisco office, according to court documents.

BitFury has since moved to demur the lawsuit through a series of filings by its law firm Orrick, Herrington & Sutcliffe LLP dating back to June.

"As a company, we intend to fight this case vigorously. We think it without merit," BitFury legal counsel Varun Gupta told CoinDesk.

Since June, BitFury has also moved to strike portions of the complaint and push for discovery to be limited due to the fact it could lead to “confidential, proprietary or private information” being disclosed. In addition, it has argued that certain stipulations, such as the disclosure of all company communications with Golomb present an undue burden.

Golomb's statement

In a new statement, Golomb has offered new comments on the lawsuit, maintaining that he was fired under "false pretenses".

"I accepted employment and worked tirelessly to grow the company in part because I believed BitFury's CEO, Valery Vavilov, would live up to his end of the bargain," Golomb said. "Unfortunately, it turns out that my belief was misplaced. Because Valery and BitFury reneged on its promise to give me equity, I was forced to bring a lawsuit to vindicate my rights."

Golomb further called allegations that he was abusive to colleagues "outrageous", contending that he displayed "flawless conduct" during his tenure.

"These allegations amount to nothing more than ill-advised litigation tactics coming from a desperate company," he said.

Compounding the situation, Golomb said, is that BitFury has since grown to become a leader in the bitcoin space, a position he argues he helped the company achieve.

Golomb added:

"When I joined the BitFury in early 2014, it was just another brand new startup in Ukraine and in the crowded bitcoin space that wanted to become an internationally recognized leader."

The next hearing in the case is scheduled for 9:30am on 30th December.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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