• ConsenSys is facing a shareholder vote over the controversial transfer of company assets, which could have wide-ranging consequences for the Ethereum developer.
• The case was brought by 35 former employees who claim they were squeezed out of their shares held in a previous incarnation of the company.
• Today marks the next stage in this ongoing legal battle, which if won by the former employees could have major implications for corporate governance and blockchain technology.
ConsenSys Facing Controversial Shareholder Vote
The Brooklyn-based Ethereum developer ConsenSys is facing a shareholder vote today that could have wide-ranging consequences for the company. This follows a series of Swiss court rulings related to claims from 35 former employees that they were squeezed out of their shares held in a previous incarnation of the company when ConsenSys executed a series of corporate maneuvers to transfer its core assets into a new U.S.-based entity formed in 2020.
Legal Battle with Former Employees
The legal battle has been ongoing for three years and according to legal experts contacted by CoinDesk, appears to be tipping in favor of the former employees. Gabriel Tumlos, one of those involved in the suit, says “the thing that keeps me going is that at the core of all this is the blockchain story” as it could potentially have major implications for corporate governance and blockchain technology should they win their case against Consensys.
Core Assets Transferred Out
At issue are claims that products like Infura, PegaSys, Codefi and MetaMask as well as several foreign subsidiaries were transferred out of Consensys’ Swiss entity into an American one without taking proper account of their value or giving due consideration to shareholders. As a result many lost much or all their equity investment despite having invested significant time and effort into building up these products under an employment agreement with Consensys which had granted them equity rights on this basis.
Joseph Lubin Speaks Out
ConsenSys founder Joseph Lubin has spoken about his regret at not being able to prevent such an outcome but maintains he was unaware until it was too late and points out that although difficult decisions had to be made these decisions were taken with an eye towards protecting jobs and making sure projects can continue running essential services on behalf of customers who relied on them while also ensuring fairness amongst stakeholders including customers and vendors alike.
This case will have far reaching implications not just for Consensys but also potentially other companies operating within cryptocurrency markets should they similarly fail to take account sufficient account of ownership rights prior to transferring assets between entities or countries particularly where there may be discrepancies between local laws governing ownership rights versus what may be established elsewhere within any given ecosystem or market place.