Joseph Lubin, the co-founder of Ethereum, may be sued by Harrison Hines, a former employee at his company ConsenSys. Hines intends to seek over $13 million for “breach of contract, alleged fraud, unpaid profits and unjust enrichment”. He began the legal process against Lubin in June.
Based on the summons brought by Hines’ lawyer, the relief they intend to get is monetary damages for unpaid profits to the sum of $404,783 and $12,827,000 in unpaid profits and fraud, quasi-contract, and contract claims. Hines has not submitted details or documentation for the case. A Coindesk article states that, since the timeline for filing a lawsuit has passed, an out-of-court settlement might be a likely possibility.
A Failed Venture?
The lawsuit marks the culmination of tensions between Lubin and Hines. The latter headed Token Foundry, which was launched in 2018 and functioned as a spoke or division of the ConsenSys studio, for approximately four months before launching a similar venture on his own. Token Foundry’s business consisted of convincing clients about its token-design services, as well as facilitating the promotion and marketing of token sales. Originally, there were fees attached to the consulting services. The outfit also made money from the sales of tokens that Token Foundry contributed to launch.
At a conference last year, Lubin predicted revenue figures of over $50 million for Token Foundry in 2018. Some of their major clients included FOAM – a $16.5 million token sale, Virtue Poker – a $18.5 million token sale, and Dether – a $13.4 million token sale. Reports earlier this year surmised that Token Foundry might be a dead venture. The same report also quoted Hines as saying that he would never again work for a company “that someone else has control of.”
At the beginning of 2019, ConsenSys released a press release that discussed restructuring of Token Foundry to become ConsenSys Digital Securities (CDS). CDS is an advisory firm that will function as an advisor for digital asset structuring as well as security token offerings. A Forbes profile of Joseph Lubin detailed several problems at ConsenSys, including the lack of revenues and a workplace where office politics was the norma.