Former Employees File Lawsuit Against ConsenSys Founder Joseph Lubin
A group of more than 24 former employees of ConsenSys, an Ethereum infrastructure firm, have initiated a lawsuit against the company’s founder and CEO, Joseph Lubin. The former employees claim that Lubin violated a “no-dilution promise” made in 2015, resulting in their equity shares being significantly devalued.
Allegations Against Joseph Lubin
The lawsuit, filed in a New York Supreme Court on October 19, accuses Lubin of orchestrating the transfer of important assets, such as the popular crypto wallet MetaMask, to a new U.S.-based entity in 2020. This move allegedly diminished the value of the shares held by the early employees.
The lawsuit also implicates investment bank JPMorgan as one of the defendants, claiming that the bank played a key role in negotiating the asset transfer and subsequently became an equity holder in the U.S.-based entity.
Breach of Promise
The crux of the lawsuit revolves around an alleged document in which Lubin promised not to dilute employee equity shares. The document reportedly stated that ConsenSys members’ percentage would not be diluted by additional issuance. However, the plaintiffs argue that Lubin broke this promise and personally benefited from the dilution, leaving them with shares of little value.
Response from ConsenSys
A spokesperson for ConsenSys dismissed the claims as “frivolous” and stated that the plaintiffs are attempting legal action in the U.S. after failed attempts in a Swiss court. They asserted that the plaintiffs were never employees of ConsenSys Software and accused them of trying to enrich themselves at others’ expense.
Background on ConsenSys and Lubin
The former employees were part of an early iteration of ConsenSys, which was founded by Lubin in Brooklyn in 2014. They agreed to lower pay in exchange for equity in the company. The present version of ConsenSys has received significant investments and is valued at over $7 billion.
Previous Legal Battle
This lawsuit is not the first legal dispute involving Lubin and ConsenSys. In January 2023, the High Court ruled in favor of the plaintiffs and ordered an investigation into alleged fraudulent transfers and asset valuations.
Hot Take: Former ConsenSys Employees Sue Founder Joseph Lubin for Breach of Promise
A group of more than 24 former employees of ConsenSys has filed a lawsuit against the company’s founder and CEO, Joseph Lubin. They claim that Lubin violated a promise not to dilute their equity shares, resulting in diminished value. The lawsuit alleges that important assets were transferred to a new entity, devaluing the shares held by the early employees. Investment bank JPMorgan is also named as a defendant for its involvement in the asset transfer. This legal battle follows previous disputes involving Lubin and ConsenSys. A spokesperson for ConsenSys dismissed the claims as baseless, stating that the plaintiffs are attempting to profit from others’ success.
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