Ava Labs CEO dismisses report of alleged conspiracy with law firm

Ava Labs CEO dismisses report of alleged conspiracy with law firm

Ava Labs CEO Emin Gün Sirer has denied allegations that the company paid a law firm to harm competitors through class action lawsuits and distract regulators.

CryptoLeaks claims in a report on Friday that Ava, the core developer of the Avalanche blockchain, entered into a secret pact with attorney Kyle Roche in September 2019.

As part of the alleged deal, Ava granted Roche 1% of the supply of AVAX tokens and a similar amount of equity in exchange for bringing lawsuits against parties in crypto.

The outlet also released a series of secretly recorded videos - without attribution - that show Kyle talking about his close relationship with the CEO and COO of Ava Labs, whom he trusts like brothers.

“We made a deal where I agreed to provide legal services in exchange for a certain percentage of the token supply,” Kyle said, adding that he was the first person to receive equity in Ava Labs after VC firm Andreesen Horowitz.

CryptoLeaks claimed that the pact was intended to use the American "gangster-style" legal system to harm Ava Labs or Avalanche's competitors, divert regulators' attention from the commercial nature of the company by suing other crypto actors, and secretly pursue Emin Gün Sirer's personal vendettas against individuals.

“I think litigation is an underused tool by everyone,” Roche said.

During the Investigation proceedings in a legal dispute Lawyers can force the production of documents and information. The simple fact of a lawsuit itself can cause negative publicity about the defendant.

In the videos, Kyle also describes himself as Ava Labs' in-house crypto expert.

"I'm one of the top 10 in the world. I've seen the inside of every single crypto company."

Roches LinkedIn profile but does not show any links to Ava or Avalanche.

He also claims that Ava Labs wasn't sued because he made sure the SEC had "other magnets to go after."

Mister Reacts to the allegations early Monday, calling the information in the report “conspiracy theory nonsense.”

Ava Labs was founded in 2018 and counts 27 investors, including Galaxy Digital, Balaji Srinivasan and Polychain. Crunchbase data shows. The company's Avalanche blockchain completed a $230 million token sale in September last year, led by embattled crypto hedge fund Three Arrows Capital.

The CEO of Ava Labs publicly welcomes the lawsuit filed by Roche Freedman

In October, Roche Freedman filed a class action lawsuit against Tether and Bitfinex for allegedly manipulating the cryptocurrency market “to create the biggest bubble in history.”

The CEO of Ava Labs applauded the move on Twitter, praising the law firm behind the case as "absolutely top notch."

In July, Roche Freedman Solana sued for allegedly selling and promoting unregistered securities. Before that, the company sued Binance due to claims, the exchange illegally sold UST to investors and caused them heavy losses. CryptoLeaks claims the firm has filed 25 class action lawsuits so far.

Mixed reactions to CryptoLeaks' claims

Not everyone in the crypto community seemed to trust the CryptoLeaks report, with some claiming the information did not prove anyone was wronged.

Andrew Thurman, content lead at blockchain analytics firm Nansen, claimed that the outlet is funded by Internet Computer. Especially Roche Freedman last year filed a class action lawsuit against Dfinity – the company behind Internet Computer.

Others including crypto VC Mike Dudas said On Twitter, the allegations need to be addressed by Ava Labs' core team.

Ava Labs and Roche Freedman did not respond to Blockworks' request for comment by press time.

The AVAX token is down 12% in the last 24 hours, according to data compiled by Blockworks.

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The post “Ava Labs CEO Rejects Report of Alleged Conspiracy with Law Firm” is not financial advice.