Two former senior executives at blockchain company Theta Labs have filed separate whistleblower lawsuits in California's Los Angeles Superior Court, alleging CEO Mitch Liu engaged in years of deception, market manipulation, and retaliation.
Former executives Jerry Kowal and Andrea Berry filed complaints alleging Liu used Theta Labs and its parent company, Sliver VR Technologies, to inflate token prices through misleading partnerships and undisclosed insider token sales. The lawsuits describe a "years-long pattern of self-dealing" tied to Theta's crypto tokens and NFT marketplace.
Attorney Mark Mermelstein, representing Kowal, told Decrypt: "Mitch Liu used Theta Labs as his personal trading vehicle, perpetrating fraud, self-dealing, and market manipulation. His calculated 'pump-and-dump' schemes repeatedly wiped out investor and employee value."
The complaints detail several specific allegations. Berry's filing claims Theta publicly misrepresented a routine cloud services agreement with Google as a strategic partnership. According to the complaint, Theta announced a "partnership" with Google in May 2020, but the relationship was actually a $7 million cloud-services agreement where Theta was merely a customer.
Other allegations include generating false bids for NFTs linked to high-profile celebrity partnerships (including with Katy Perry) and creating "fake or otherwise highly misleading 'partnerships' with high-profile companies" to pump token value. The lawsuits also allege that some of Theta's purported partners were actually other companies created and wholly owned by Liu himself.
Berry's complaint states she "learned of, witnessed, and reported numerous instances of fraudulent conduct and self-dealing by Theta employees and executives" during her employment, including "schemes aimed at inflating the price of the THETA Token and personally enriching Mr. Liu."
Theta Labs, a Delaware-incorporated company, develops the Theta Network—a decentralized platform focused on media delivery, computing, and storage. The network uses two primary tokens: THETA for governance and staking, and TFUEL for transaction fees and network services. The company has recently been developing a hybrid cloud layer called Theta EdgeCloud.
Neither Liu nor Theta Labs representatives responded to Decrypt's request for comment on the allegations.
SAUCE
HBAR
BTC
GEE
AAVE