The chief executive officer of the decentralized finance (DeFi) company Curve Finance, Michael Egorov, is being sued for fraud in the United States by the venture capital firms ParaFi Capital, Framework Ventures, and 1kx.According to a complaint lodged in the Superior Court of California, San Francisco, Egorov is accused of stealing trade secrets from the three venture capital firms and defrauding the firms out of almost $1 million while misleading the investors about the possibility of owning a stake in Curve.
Egorov allegedly relocated to Switzerland to protect himself from the unavoidable legal repercussions, according to the April lawsuit.Since 2020, the three businesses have been suing Egorov and his company Swiss Stake in Switzerland for breach of contract.According to DeFi Llama, Curve Finance, a decentralized exchange built on the Ethereum blockchain, is one of the largest DeFi trading platforms with almost $4.07 billion in total locked value.A decentralized autonomous organization (DAO), Curve is run by the CRV token, which may be purchased or earned by making contributions to its liquidity pools.
According to the lawsuit, Egorov allegedly “engaged in a brazen, multi-faceted scheme to defraud” Framework Ventures, ParaFi Capital, and 1kx over a six-month period beginning in early 2020.Egorov allegedly “misappropriated” the companies’ “trade secrets,” according to the venture capitalists, 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.”Additionally, the VCs assert that Egorov offered to sell Plaintiffs shares of Swiss Stake for nearly $1 million (claiming that a total of $925,233.54 in USDC was paid to a wallet designated by Egorov), but had no intention of following through.
In a filing on May 22, Egorov’s attorneys claimed that the claims of fraud stem from the dissolution of a contract between the VCs and Swiss Stake and that the allegedly misappropriated “trade secrets” were really the names of well-known investors.Swiss Stake allegedly made a prompt offer to repay the nearly $1 million invested funds, according to Egorov’s side.According to a May 22 filing by Egorov’s attorneys, “To explain their apparent forum shopping, Plaintiffs invented a new and convincing story casting Egorov as a terrible villain who deceived three naive VC companies into handing over “trade secrets.” The argument made against Egorov is “nothing more than a clever narrative,” according to his lawyers.
It is sorry that this has come to the point of litigation, but we firmly feel the facts are on our side, according to a statement emailed to CoinDesk by the law firm Latham & Watkins on behalf of the three venture capital firms.The lawsuit speaks for itself in that regard.The goal of our clients is to hold Michael Egorov fully accountable for his actions.