A Swiss legal battle between former employees of ConsenSys AG and its founder, Joseph Lubin, has made its way to the U.S.
The 27 former employees who joined the company in its early days claim they were deprived of their equity after Lubin, with the help of JPMorgan, executed a series of corporate maneuvers transferring core assets from the original Swiss incarnation of the company into an American firm formed in 2020, according to a lawsuit filed in the Supreme Court of the State of New York on Thursday.
The filing alleges Lubin, a co-founder of the Ethereum blockchain, stripped ConsenSys AG, also known as Mesh, of its main assets – including crypto wallet provider MetaMask – and transferred them to ConsenSys Software Inc. (CSI), incorporated in Delaware, without bringing over the ex-employees as equity holders.
"Lubin promised that these early employees would receive equity in ConsenSys," the filing alleges. "Then he broke his word. In the process, he violated his legal commitments and duties. While Lubin got rich, Plaintiffs got nothing."
The filing said the Brooklyn-based firm, which develops products on Ethereum, has raised $726.7 million from investors at a valuation of more than $7 billion. But instead of equity, the former employees said, they now hold "virtually worthless pieces of paper." They were robbed of their expectation to share in ConsenSys' success for their "increased risk, lower salaries, and foundational efforts as early employees," the filing alleges.
The U.S.-based ConsenSys dismissed the allegations.
"After two years of getting nowhere with their frivolous claims against ConsenSys Mesh in a Swiss court, plaintiffs now believe their meritless claims stand a better chance of yielding a pay day if they game U.S. courts and entangle ConsenSys Software and other unrelated parties in litigation," a company spokesperson said. "We fully expect that the plaintiffs, who were never employees of ConsenSys Software, will soon find this gambit is another fruitless attempt to enrich themselves from the success of others."
A spokesperson for JPMorgan declined to comment.
UPDATE (Oct. 20, 11:49 UTC): Adds JPMorgan response in last paragraph.
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