A group claiming to represent 35 former ConsenSys AG (CAG) employees has demanded an audit under the Swiss Code of Obligations to look into “severe irregularities” that they say happened at the company in mid-2020. CAG, also known as Mesh, is the firm behind top Ethereum-based wallet provider MetaMask and was created by Joseph Lubin, the co-founder of Ethereum.
According to a press release, on March 1, a group of employees claiming to represent around half of all known shareholders submitted the request to a Swiss Court. On August 14, 2020, the group claimed that “essential intellectual property and subsidiaries were illegally transferred” from CosenSys AG (CAG) into a new entity named “ConsenSys Software Incorporated” (CSI).
According to the allegations, the IP and subsidiaries were transferred to “ConsenSys Software Incorporated (CSI) in return for a 10% stake in CSI and an offset of founder Joseph Lubin’s $39 million loan.” Traditional financial institutions such as JP Morgan Chase reportedly purchased holdings in MetaMask and Ethereum developer platform Ifura, while the intellectual property was utilised as a significant selling factor to gain investment for CSI at a $3 billion value in 2021.
According to ConsenSys, the value of the property transfer was correct at the time. The landscape has changed a lot since mid-2020, which is why the value of the assets has increased so much.
The new action against ConsenSys and Lubin comes only a few months after former general partner (GP) Kavita Gupta filed a complaint against the corporation in New York, saying that it failed to pay out the agreed-upon carry percent for a fund she managed between 2017 and 2019. In mid-January, Consensys sued Gupta, claiming that she “fraudulently enticed ConsenSys to hire her” by giving ConsenSys fake academic and work credentials.