The Rotten State of Crypto: A Lawsuit Sheds Light on Bitcoin Fraud
The Promise of Crypto
In the early days of cryptocurrency, working in the industry felt like “building the future of the internet.” It was all about transparency, egalitarianism, and decentralization. Open source, making software code accessible to everyone, seemed like a catalyst for this new dawn. But according to Joel Dietz, a founding member of Ethereum, things have gone off track.
A Seedy Backroom Deal
Dietz is now suing former collaborator Aaron Davis in a California state court, alleging that Davis swindled him out of his ownership stake in MetaMask, an Ethereum-based crypto wallet. Dietz claims that this backroom deal is endemic in the crypto industry. Named as defendants are Dan Finlay, who partnered with Davis on MetaMask, Consensys, the company that owns the wallet, and Joe Lubin, Ethereum cofounder and Consensys CEO.
Cleaning Up the Industry
Dietz’s lawsuit seeks financial compensation, but it is also an attempt to draw attention to the state of the crypto industry. Over the years, the industry has been plagued by legal battles, often involving abuse of power. US regulators have filed civil charges against major crypto exchanges, accusing them of misleading or mistreating investors. Dietz believes that the industry needs to clean up its act.
The MetaMask Dispute
The core of the lawsuit revolves around the allegation that Davis stopped communicating with Dietz and continued working on MetaMask with a new collaborator, Finlay. The pair then allegedly sold or transferred ownership of MetaMask to Consensys. Meanwhile, Dietz claims that his involvement in the project was erased from the public record.
The Questions at Hand
Yar Chaikovsky, a global head of intellectual property at a law firm, states that the case will come down to two main questions. First, whether a partnership was truly established between Dietz and Davis. And second, when Dietz should have realized that his ownership interest had been taken from him.
The Ignored Founder
The lawsuit highlights the confusion surrounding ownership in the crypto industry. While Dietz claims to have evidence of a partnership, the defense can argue that Dietz should have raised his concerns earlier. The case’s outcome depends on when the statute of limitations started ticking.
A Pattern of Ownership Disputes
Dietz is not the only person suing Consensys. A second lawsuit in New York raises similar concerns about ownership. Former Consensys employees allege that Lubin and others intentionally devalued their equity by transferring valuable assets, including MetaMask, to a new entity. There are ongoing legal actions in both the US and Switzerland.
The Dark Side of Crypto
While neither Dietz nor the former Consensys staff are guaranteed to win their lawsuits, their cases shed light on the underlying issues within the crypto industry. The promise of transparency and decentralization has been overshadowed by chicanery and profiteering. There is a disconnect between the public image of crypto and the reality behind closed doors. The industry needs to address these concerns and restore trust.
Source: Crypto Started With Grand Dreams, Then Backroom Deals. Now It’s Mired in Lawsuits
