Ethereum co-founder Joseph Lubin faces new legal fight over employee equity 

The lawsuit claims Lubin attracted the early employees with the promise of a solid stake in Consensys AG, but allegedly didn’t follow through

article-image

ConsenSys founder Joe Lubin | Source: MoneyConf (CC license)

share

Several former Consensys employees have sued co-founder Joseph Lubin, alleging he deprived them of their stock awards’ value.

The lawsuit, filed Thursday, accused Lubin of allegedly luring highly skilled professionals into leaving stable jobs with the vision of building a “crypto Google” and assuring them significant rewards for their risk. 

This promise, the plaintiffs claimed in the lawsuit, went unfulfilled, leading to their legal action. The complaint was filed Friday in a New York state court.

The lawsuit claims Lubin attracted the early employees with the promise of a solid stake in Switzerland-based Consensys AG, but allegedly didn’t follow through. 

“The idea was that Consensys — and its projects and [intellectual property] — would be owned by all employees. Especially early employees,” lawyers for the plaintiffs wrote.

Lubin allegedly drained the core assets from the original Consensys hub, funneling them into a new entity called Consensys Software (CSI), still under his control. 

This maneuver effectively sank the value of the shares belonging to this initial team, rendering them almost worthless, according to the lawsuit.

“Yet Lubin did not bring over many of his early employees—the Plaintiffs here—as equity holders in the new company. Instead, they continued to hold shares in the far less valuable entity that had been stripped of its assets,” the lawsuit said.

This plan is said to have included perks for JPMorgan, securing the bank a board position and a stake in the new entity.

Playing a “pivotal part” in Lubin’s strategy, JPMorgan, through its then-blockchain lead Umar Farooq, allegedly engaged in months of discussions with Lubin ahead of the scheduled transfer of assets, the suit said.

Blockworks has reached out to JPMorgan for comment.

Read more: New York AG sues DCG, Gemini and Genesis in ‘sweeping lawsuit’

The lawsuit bears resemblance to an earlier Swiss court case that wasn’t successful for the ex-employees, a Consensys spokesperson told Blockworks.

“Plaintiffs now believe their meritless claims stand a better chance of yielding a pay day if they game US courts and entangle Consensys Software and other unrelated parties in litigation,” they added.

“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.”

The plaintiffs seek to secure damages from Lubin and Consensys in an amount to be determined at trial.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

logo.jpeg

Research

Akash is a general-purpose compute platform with GPUs, storage, LLM training or inference, and validator hosting through its two-sided marketplace.

article-image

The SEC could allow half a dozen or more such funds to launch at once, Ark Invest CEO says

article-image

2023 saw a decline in a16z crypto funding, but the behemoth VC firm teased what it’s excited for next year

article-image

“Iran Unchained” launched a new version of its grant platform to make donations to activists easier

article-image

The stablecoin marks the first time a regulated European bank has made a euro-pegged stablecoin available on a crypto exchange

article-image

Build it and they will come, perhaps, but making crypto easier to use is turning out to be just as important

article-image

Amid moves by Itau Unibanco and Nubank, the country could serve as “a proof of concept” for TradFi-crypto integrations, industry research exec says