Top VC Firms Sue Curve Founder Over Alleged Deception and Misuse of Trade Secrets
ParaFi, Framework Ventures, and 1kx have begun a legal battle against Michael Egorov, Founder of decentralized exchange, Curve.
They allege Egorov of deceptive practices and misappropriation of trade secrets, leading to financial damages.
Three leading cryptocurrency venture capital firms have engaged in a high-stakes legal battle in San Francisco against Michael Egorov, the founder of the popular decentralized exchange, Curve. The plaintiffs — ParaFi, Framework Ventures, and 1kx — have accused Egorov of deceptive practices and misappropriation of trade secrets, which they allege led to financial damages.
Egorov‘s legal team has dismissed these claims as “nothing more than a clever narrative”. They assert the allegations made in the San Francisco court are merely a byproduct of the ongoing litigation in Switzerland, initiated by the plaintiffs in 2020.
The defense team stated that the plaintiffs have invented a new and compelling story in order to justify their blatant forum shopping. This story attempts to paint Egorov as an antagonist who tricked the three VC firms into divulging trade secrets and investing $1 million in funds.
The lawsuit asserts that Egorov, while employed by NuCypher in the US, conceived the idea for Curve and developed a small-scale prototype. To scale Curve, Egorov sought investment from the three VC firms.
The plaintiffs, all users of the Curve platform, invested in Swiss Stake because they saw a unique and potentially profitable opportunity to help develop a successful automated market-maker. They allege Egorov needed capital and the legitimacy provided by California-based DeFi venture funds to launch his project.
The lawsuit states that the plaintiffs accuse Egorov of giving false statements about the utilization of their assets by Swiss Stake GmbH, a company that holds the Curve license. They claim Egorov gave assurances that the company would use their assets to hire developers, lawyers, and other staff. However, the VC firms claim that Egorov had no intention of relinquishing control of Curve.
The lawsuit also alleges that Egorov justified an unfair shift of power in his favor by claiming he had locked up more CRV, Curve’s governance token, than he originally intended. The plaintiffs accuse Egorov of selling just enough of his CRV tokens to generate profits while maintaining overwhelming control.
VC firms state they weren’t given the equity they were promised, funding was never returned, and they never got the CRV they were owed. They further allege that they lost business opportunities with Curve’s competitors due to Egorov’s actions.
Egorov has said he will comment after discussing with his lawyers, while the attorneys for the VC firms stated they would provide comments later. This story is developing.
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