Joseph Lubin, Consensys sued by early employees over 2020 restructuring News ▸ Switzerland · US ▸ Ethereum ▸ Legal
Joseph Lubin, Consensys sued by early employees over 2020 restructuring
More than two dozen early employees of Consensys when it was a Switzerland-based startup claim to have been rooked out of their equity shares when the firm relocated stateside.
2 min read
Updated: Oct. 20, 2023 at 11:20 pm UTC
Ivo Näpflin for Lift conference / CC BY 2.0 DEED / Flickr.com. Remixed by CryptoSlate
Ethereum (ETH) co-founder and Consensys CEO Joseph Lubin faces a lawsuit from 27 early employees who allege Lubin broke contractual agreements regarding equity shares.
According to the lawsuit, filed in the New York Supreme Court, Lubin promised employees “hub equity” in ConsenSys (as it was styled at the time), meaning shares in the central ConsenSys entity that would own the various products and subsidiaries.
This equity was offered as compensation for joining the company in its early stages at below-market salaries. Lubin stated the employees would be “joint stakeholders” and share in the potential upside of ConsenSys’s growth.
However, in August 2020, ConsenSys underwent a restructuring whereby the core assets, including MetaMask, Infura, and Codefi, were transferred to a new Delaware entity, ConsenSys Software Inc. (CSI), leaving the original Swiss entity ConsenSys AG holding less valuable assets.
Lubin emerged with a 52.5% stake in CSI, while most early employees were not offered shares. The employees allege this was a breach of contract regarding the promised “hub equity.”
The filing claims the asset transfer was executed without notice, shareholder vote, or offering employees the chance to participate. It alleges the valuation was manipulated to benefit Lubin’s personal interests.
It further claims Lubin misled employees about their position, rights, and the company’s plans. The employees are seeking damages for lost upside in ConsenSys’s growth, which they say robbed them of returns they were promised for their early risk-taking and contributions.
The complaint, filed with the New York Supreme Court, demands a jury trial and seeks “damages in amount to be determined at trial, including, but not limited to, Plaintiff’s expectation damages, disgorgment, and Plaintiff’s damages suffered as a result of Lubin’s [et. al.’s] actions; and… granting Plaintiffs such other and further relief as the Court may deem just and proper.”
Lubin has not yet filed a response to the lawsuit.
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Jacob Oliver
Jacob Oliver is a recovering academic and English teacher turned crypto journalist and web3 writer. He holds a Ph.D. from the University of Washington.
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Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Consensys
Consensys is a venture production studio and custom software development consultancy building decentralized applications (DApps), enterprise solutions and developer tools for blockchain ecosystems, focused primarily on Ethereum..
Joseph Lubin, a Canadian entrepreneur, has made significant strides in the world of blockchain and cryptocurrency.