Early Consensys employees are alleging that Ethereum co-founder Joseph Lubin cheated them out of equity in the Brooklyn-based company.

The former employees allege in the lawsuit filed Thursday that Lubin persuaded them to abandon their careers and join Consensys taking lower salaries, with the promise they would receive equity in what Lubin vowed would become the “crypto Google.”

Lubin said these early workers would receive equity in what he referred to as the “hub” of the conglomerate of Consensys, which was founded in 2014. However, these promises were broken, the plaintiffs say.

Consensys Response

“Plaintiffs in an ongoing shareholder case against the Swiss-based web3 incubator and investor Consensys AG, which operates as Consensys Mesh, have just filed suit against U.S. blockchain software developer Consensys Software Inc. in New York state court,” Consensys said in a written reply to a request for comment from The Defiant.

“After two years of getting nowhere with their frivolous claims against Consensys Mesh in a Swiss court, plaintiffs now believe their meritless claims stand a better chance of yielding a pay day if they game U.S. courts and entangle Consensys Software and other unrelated parties in litigation. We fully expect that the plaintiffs, who were never employees of Consensys Software, will soon find this gambit is another fruitless attempt to enrich themselves from the success of others,” the statement said.

Consensys Hub

Consensys was created to develop and expand the Ethereum blockchain. It has been largely successful in its ambition and is currently a driving force in Ethereum development, with its star product MetaMask, the most widely used non-custodial wallet. The company recently raised funds at a valuation of $7B.

Lubin divested the Consensys entity that served as the company’s hub of its primary assets, the lawsuit claims. These assets were then transferred to a new entity controlled by Lubin, Consensys Software Inc. (CSI).

Lubin purportedly did not allow many of his early employees to become equity holders in the new entity. Instead, they continued to hold shares in the less valuable entity.

JPMorgan Role

Aiding Lubin in his enterprise were supportive lieutenants and JPMorgan, which received a board seat and equity in this new structure in return.

It was as if, in the words of the plaintiffs, Google’s early employees were left with nothing while the company they helped build went public under a different entity – “Google Software Inc.”

The plaintiffs in this case, 26 ex-employees including Griffin Anderson, Gaël Blanchemain, Pelle Braendgaard, and others, have brought this Complaint against Joseph Lubin, Consensus Systems LLC, Consensys Inc., CSI, Matt Corva, JPMorgan Chase & Co., and Umar Farooq.

In January 2023, the High Court issued a judgment in favor of Plaintiffs, ordering the appointment of an auditor to investigate the alleged fraudulent transfer, such as the valuation of the transferred assets. The case had not been reviewed and accepted for filing by the County Clerk at the time of its initial filing.