Ethereum Co-Founder Joseph Lubin Faces Lawsuit from Former Consensys Employees
More than two dozen former employees of blockchain software company Consensys have filed a lawsuit against Ethereum co-founder Joseph Lubin, Consensys, and other parties. The lawsuit alleges that Lubin violated contractual promises related to equity compensation made when the employees joined the company in its early years. The lawsuit was filed on October 19, 2023, in New York state court by 27 former Consensys employees.
Allegations of Broken Promises
The court filing names Joseph Lubin, Consensys, and JPMorgan Chase as defendants. The plaintiffs claim that Lubin enticed them to join Consensys in its early days by offering equity in the parent company, Consensys AG. However, in 2020, Consensys underwent a restructuring that excluded many of the plaintiffs, resulting in their shares being devalued.
The lawsuit details that Lubin made a similar offer to each plaintiff upon joining Consensys, and an agreement was formed. The suit alleges that Lubin broke the deal by prioritizing finance over the founding employees.
Past Allegations and Denial
This is not the first time that Consensys and Lubin have faced such allegations. In March 2022, a group of former staffers lodged a petition for review under Swiss law to investigate discrepancies within Consensys AG.
A spokesperson for Lubin and Consensys has refuted the allegations, describing them as frivolous. They believe that the plaintiffs are attempting to pursue these claims in U.S. courts after failing to make progress with their claims in a Swiss court.
Hot Take: Potential Impact on Blockchain Industry
This lawsuit against Joseph Lubin and Consensys highlights the challenges faced by early employees in the blockchain industry. It raises concerns about equity compensation and the treatment of founding employees when companies undergo restructuring. If successful, this lawsuit could set a precedent for similar cases in the future and potentially impact how blockchain companies handle equity distribution. It serves as a reminder for both employers and employees to carefully consider the terms of their agreements to avoid potential disputes in the future.
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