Approximately two dozen former employees of Consensys, a prominent Ethereum infrastructure company, have filed a new lawsuit against the firm's founder and CEO, Joseph Lubin. The lawsuit alleges that Lubin diluted employee equity and violated prior commitments. The ex-employees assert that Lubin, who is also one of the co-founders of Ethereum, breached a "non-dilution pledge" he made in 2015. These claims were detailed in a filing by the plaintiffs in New York State Supreme Court on October 19.
The plaintiffs contend that Lubin attracted talented and motivated individuals to work for Consensys in late 2014. promising that the company would be the "future of cryptocurrency" and the "Google of crypto." During this period, Lubin is purported to have declared, in a filing, that he would not dilute employee equity. However, the plaintiffs assert that he later failed to uphold this commitment. The filing reportedly stated, "My intention is that the percentage received by Consensys members will not be diluted by additional issuances."
According to the plaintiffs, Lubin not only broke his promise but also personally benefited financially from it, while they received nothing in return. The plaintiffs hold shares in Consensys AG (formerly Consensys Mesh), a Swiss holding company, which they allege became "worthless" after Lubin transferred cryptocurrency wallet MetaMask and other assets to a new U.S. entity in 2020. The plaintiffs also name JPMorgan Chase as one of seven defendants, contending that it "played a key role" in negotiating the asset transfer and becoming a new shareholder in the new U.S. entity.
The plaintiffs claim that Lubin and J.P. Morgan concealed many details of the negotiations, leaving them unaware of crucial information. They assert that Lubin excluded many of his early employees, including the plaintiffs, as shareholders in the new company, leaving them with shares in a less valuable entity. A spokesperson for Consensys described the accusations as "frivolous" and suggested that the plaintiffs had failed to make progress with their claims in Swiss courts, prompting them to pursue legal action in the United States.
Consensys was founded in October 2014. around nine months before the launch of the Ethereum blockchain in mid-2015. The company is involved in developing and hosting infrastructure projects that support a significant portion of the Ethereum network. The plaintiffs are seeking damages through six separate causes of action, with the specific amounts to be determined during the trial.
