‘He Broke His Word’ – Former Consensus Employees Sue Founder of Employee Equity Agreement
More than two dozen former employees of ethereum infrastructure firm ConsenSys have filed a new lawsuit alleging that the company's founder and CEO, Joseph Lubin, forfeited employee equity shares on earlier promises.
Former employees Lubin – who is the co-founder of Ethereum – in 2015 The plaintiff filed a lawsuit in New York Supreme Court on October 19, alleging that he breached this “indissoluble covenant” made in 2015.
The plaintiffs allege that Lubin lured his “smart and motivated” colleagues to work for ConsenSys in late 2014, claiming that the company would be “the future of cryptocurrency” and the “crypto Google.”
Around that time, Lubins said in a filing that he would not reduce the employee's equity stake. The plaintiffs later broke their promise.
“It is my intention that the percentage that ConsenSys members receive will not be diluted by the additional issue,” the document reads.
The plaintiffs argued that Lubin not only kept his promises, but “got rich.”
“He broke his word [and] He breached his legal duties and obligations. While Lubin was rich, the plaintiffs got nothing.
When Lubin transferred crypto wallet MetaMask and other assets to the new entity in the United States in 2020, the plaintiffs' shares in Switzerland-based Consensy AG — formerly ConsenSys Mesh — became “worthless.”
The plaintiffs also named the investment bank JPMorgan – one of the seven defendants – “played a key role” in negotiating the transfer of assets and became the new owner of equity in the new American entity.
“Lubin, his inner circle, and JPMorgan kept the details of the deal secret—plaintiffs were left in the dark.
“Lubin did not bring many of his former employees—the plaintiffs here—as equity owners in the new company. Instead, they continue to hold shares in the undervalued entity whose assets have been expropriated,” the plaintiffs added.
ConsenSys says the plaintiffs' claims are ‘absurd'
A Consensus spokesperson told Cointelegraph that after two years of getting nowhere with their claims in a Swiss court, the plaintiffs are now trying their luck in the US legal arena, calling the claims “meritless.”
Related: ConsenSys founder ‘bullies' on Ethereum following crypto winter performance
“[The] Plaintiffs now believe they have a better chance of getting a payday if their claims play out in US courts and embroil ConsenSys Software and other unrelated parties in the litigation. A ConsenSys representative added:
“We fully expect that the plaintiffs, who are not employees of Consensus Software, will soon find that this gambit is another fruitless attempt to enrich themselves from the success of others.”
In Switzerland, the plaintiff's lawsuit “went nowhere,” but the country's highest court, the Zug Court, ruled against the plaintiffs.
The plaintiffs said the verdict supports their position that Lubin breached his duty.
ConsenSys in 2010 Founded in October 2014, nine months before the launch of the Ethereum blockchain in mid-2015.
The company develops and manages the infrastructure projects that support most of the Ethereum network.
The defendants are seeking damages on six separate causes of action, in amounts to be determined at trial.
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