Egorov, CEO of Curve Finance, sued by 3 DeFi-focused venture capital firms.
The CEO of Curve Finance, Michael Egorov, is being sued for fraud by venture capital firms ParaFi Capital, Framework Ventures, and 1kx in the United States. The complaint filed in the Superior Court of California, San Francisco, accuses Egorov of misappropriating trade secrets from the three VC firms and defrauding them of almost $1 million while falsely promising a possible stake in Curve to gain their trust and support. The lawsuit, filed in April, also alleges that Egorov moved to Switzerland to avoid legal consequences. The three firms have been pursuing a breach-of-contract case in Switzerland against Egorov and his company Swiss Stake since 2020.
Curve Finance is a decentralized exchange built on the Ethereum blockchain and ranks among the biggest DeFi trading platforms, with $4.07 billion in total locked value according to DeFi Llama. It operates as a decentralized autonomous organization (DAO), controlled by the CRV token, which can be bought or earned by contributing to Curve’s liquidity pools.
Beginning in early 2020, Framework Ventures, ParaFi Capital, and 1kx claim that Egorov “engaged in a brazen, multi-faceted scheme to defraud” them over a six-month period, according to the complaint. The VCs also allege Egorov “misappropriated” the firms’ “trade secrets,” including “information that proved to be critical to the development of Curve, such as key industry contacts, potential investors, and knowledge of how to manage an investment round – all while falsely promising that Plaintiffs would benefit from the fruits of their labor, not just Egorov.”
The VC’s also claim Egorov offered to sell shares of Swiss Stake to Plaintiffs for close to $1 million (alleging that a combined $925,233.54 worth of USDC was sent to a wallet specified by Egorov), but had no intention of transferring shares of Swiss Stake to the firms. Egorov’s lawyers said in a May 22 filing that the allegations of fraud derive from the termination of a contract between the VCs and Swiss Stake, and that the “trade secrets” in question were really the names of widely known investors. Egorov’s side also claims Swiss Stake promptly offered to return the roughly $1 million of invested funds.
- ADA developer denies SEC’s claim that the token is a security.
- Stablecoin market cap drops, whales unaffected Santiment.
- Are DAOs destined for ‘decentralization theater’?
Law firm Latham & Watkins, representing the three VC firms, provided blockchain with a statement via email: “It is regrettable this has reached the point of litigation, but we strongly believe the facts are on our side. In that respect, the complaint speaks for itself. Our clients are resolved to seek full accountability of Michael Egorov for his behavior.” Egorov’s lawyers, DLA Piper, had not responded to an emailed request for comment by press time.
Edited by Sheldon Reback.