ConsenSys CEO Joseph Lubin Faces Legal Battle Over Equity Shares

Legal Dispute Over Equity Shares

Joseph Lubin, founder and CEO of ConsenSys, is embroiled in a legal battle with 27 former employees. The lawsuit, filed in the New York Supreme Court, centers on allegations that Lubin violated a no-dilution agreement regarding their equity shares, initially made in 2015. The ex-employees assert that their shares in ConsenSys AG were devalued following a major asset transfer to a new U.S.-based entity, ConsenSys Software Inc (CSI), in 2020.

Allegations of Secret Asset Transfer

The plaintiffs claim that significant assets, including the MetaMask cryptocurrency wallet, were secretly moved to CSI. They also allege that JPMorgan was involved in these negotiations and became an equity holder in CSI, which was kept hidden from them. This transfer allegedly left the former employees with worthless shares in the Swiss-based holding company.

Claims Against Lubin and ConsenSys

The lawsuit accuses Lubin and others of profiting at the expense of the former employees, leading to depreciated shares due to asset loss in ConsenSys AG. The plaintiffs seek damages for breach of contract, breach of fiduciary duty, fraud, and unjust enrichment. They also demand an impartial asset assessment and assert their rights to equity in CSI.

ConsenSys' Response and Court Ruling

ConsenSys has dismissed the lawsuit as frivolous. However, the High Court of Zug has ruled in favor of the plaintiffs, adding a layer of complexity to the case. The legal dispute emerges amid ConsenSys' significant fundraising efforts, recently raising $726.7 million and achieving a valuation exceeding $7 billion.