Ava Labs founder awarded $3M in crypto defamation suit

May 2, 2023 Coin Telegraph

AVA Labs

Emin Gün Sirer, the founder and CEO of Ava Labs, has been awarded millions in damages after an influencer publicly accused him of being part of a Turkish terrorist group in 2021.

Ava Labs founder and CEO Emin Gün Sirer has reportedly won a defamation suit against a crypto influencer, awarding him $3 million in damages.

The lawsuit stemmed from claims made in a February 2021 YouTube video by crypto influencer Emre Aksoy linking Sirer to an Islamist group the Turkish government calls the Fethullah Terrorist Organization (FETO).

Askoy told his large YouTube following that Sirer was a group member, directing them to short the Avalanche (AVAX) token. According to Sirer, the defamation cost him millions and crashed the price of AVAX at the time. The token fell 57% from its $55.51 high on Feb. 11, 2021, to $23.85 by the end of the month.

Aksoy was described as a “marketing expert” that was paid to promote a product competing with Ava Labs, according to the suit. Cointelegraph contacted Emre Aksoy for a comment but did not receive a response by publication time.

The founder of blockchain platform Ava Labs can pursue defamation claims against a cryptocurrency marketer and "thought leader" over comments he made on social media. https://t.co/aTpel0gxFf
— Law360 (@Law360) October 27, 2021

According to Law360, on April 28, United States district judge Beth Bloom said Sirer was entitled to $750,000 in general damages for reputational harm. The judge said a prior testimony from Sirer “adequately shows he suffered considerable reputational harm, among other things.”

The judge wrote:

“[The] Plaintiff experienced anxiety and fear during his frequent trips to Turkey because of his justified concern that he would be arrested and detained by the Turkish authorities upon entry as a result of the defendant’s allegations that he was a member of FETÖ.”

Bloom also awarded Sirer $300,000 in “special damages for his increased security costs” and $2 million in punitive damages to “deter the kind of malicious behavior perpetrated by the defendant.”

Ava Labs is the firm behind the Avalanche network, a layer-1 smart contract platform.

Speaking at a blockchain conference on New York City’s Roosevelt Island last week, Sirer commented that the industry could not consider itself mature until regulators can read and audit code.

His comments come amid a broader crypto crackdown in the U.S. where regulators have taken enforcement actions against everything from staking to stablecoins.

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NFT app Rebase co-founder accused of going ‘rogue’ in suit by partner

April 19, 2023 Coin Telegraph

Breach of Contract

An apparent business partner of Rebase's co-founder claims he was pushed out of the firm and funds he owned were moved from a joint crypto wallet.

The co-founder of the nonfungible token (NFT) project Rebase is facing a lawsuit from his apparent business partner accusing him of going “rogue” by stealing $2 million from a joint crypto wallet and ousting an apparent co-founder out of the firm.

An April 17 filing in a United States District Court in California from Krzysztof Gagacki, who says they’re the co-founder of Rebase, made eight separate complaints against the firm's other co-founder Edmond Truong.

Gagacki is demanding a jury trial for breach of contract, breach of fiduciary duty, defamation and trademark infringement.

While it is unclear exactly when the professional relationship between the two deteriorated, Gagacki alleged Truong breached a partnership contract on Oct. 27. 2022 by misappropriating $2 million into a separate wallet owned and controlled by Truong without his consent.

Gagacki claims to own a 50% share of the funds and says Truong refuses to provide him with the private keys to the digital wallet.

Krzysztof Gagacki, co-creator of https://t.co/oBDvtTLDqk and the "Cy-B3lla" Bella Hadid NFT project, sued his co-founder today for allegedly stealing $2,000,000 and "going rogue." pic.twitter.com/I3DTFR6ZhM
— Rob Freund (@RobertFreundLaw) April 18, 2023

In the filing, he claims Troung “ousted” him from the business by presenting himself to third parties as the “sole owner” and “decision maker” for Rebase.

Gagacki further alleges that Troung is stating Gagacki is no longer “employed” at the firm after things had “gotten a bit out of hand.” A LinkedIn account owned by Gagacki does not list an employment history at Rebase.

Truong also allegedly “intentionally interfered” with several prospective deals that Gagacki had been working on for the firm in addition to making several defamatory statements to the firm’s business contacts about Gagacki.

Gagacki claims these statements have had a “disastrous effect” on his reputation.

One of the deals involved American celebrity Bella Hadid, who featured in the firm’s Cy-B3lla NFT project but then refused further collaboration after it was made apparent to her that the two business partners clashed heads, the filing claimed.

Truong also allegedly seized a Twitter account relating to Hadid’s NFT collection which Gagacki claims to have the trademark rights for with his other company, IOVO AG:

“[Truong] has also commandeered the @REBASEgg and @cybellaxyz Twitter accounts. Specifically, [Truong] has changed the password for these accounts and is actively denying Mr. Gagacki access.”

Another claim mentioned by Gagacki was Truong’s unauthorized pursuit to issue a Rebase token on the Ethereum layer 2 scaling solution Arbirtrum.

If a token is issued, there may have serious ramifications for Rebase, the filing explained:

“If a Rebase app token is listed on any major cryptocurrency exchange, the market value of the tokens, which will be minted on the Arbitrum network and offered to the public, could reach many times over the Rebase app’s last round valuation of $150,000,000.”

According to the firm’s Twitter account, Rebase is set to integrate on Arbitrum on April 21:

Save the Date ⏲️

April 21st, 2023. Rebase is coming to Arbitrum! #RebaseonARB

The First AR Adventure and M2E App on $ARB pic.twitter.com/9QsMBsAlfe
— Rebase (@REBASEgg) April 11, 2023

The firm’s $150 million valuation has come on the back of venture capital funding from Animoca Capital, Anti Fund Investment Fund, LLC, DeFiance Capital and the now-bankrupt Three Arrows Capital.

Cointelegraph contacted Gagacki, Truong and Rebase but did not receive an immediate response.

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Logan Paul threatens to sue Coffeezilla over CryptoZoo ‘scam’ allegations

January 5, 2023 Coin Telegraph

Coffeezilla

YouTube boxer Logan Paul, who was spearheading the CryptoZoo NFT project, has accused Coffeezilla of publishing “defamation” about him and the project.

YouTuber Logan Paul has threatened to sue fellow YouTuber and internet detective Coffeezilla for defamation after he accused Paul’s CryptoZoo nonfungible token (NFT) project of being a “scam.”

The two have been battling back and forth on both social media and YouTube videos ever since Dec. 17, when Stephen Findeisen — also known as Coffeezilla — launched the first of a three-part video series attacking CryptoZoo and Paul, who was the face of the project.

“CryptoZoo was supposed to be a fun blockchain game that can earn you money [...] but millions of dollars of investor money later, things are still broken,” he said.

In his most recent response, Logan Paul published a YouTube video on Jan. 4 accusing the internet detective of having “led the charge to drive and monetize a narrative telling millions of people that I’m a fraud or I tried to scam my audience.”

new video
My Response To Coffeezilla’s Scam Allegations
important that you watchhttps://t.co/KbsWsXll49 pic.twitter.com/eYOHDfC2IZ
— Logan Paul (@LoganPaul) January 3, 2023

He has also accused Coffeezilla of having done so without verifying any background information or substantiating any evidence, adding that he “took multiple criminals’ words as truth and broke laws, you still published the defamation,” adding:

“I’ll see you in court.”

CryptoZoo is an NFT game with the premise of allowing “ZooKeepers” to buy NFT eggs using the game’s native token, ZOO. These eggs would then be hatched into animals that can be bred to create hybrid animals.

The hybrids were intended to be tradeable and provide ZooKeepers with ZOO, with Paul describing the project in an Aug. 21, 2021, podcast as a “really fun game that makes you money.”

ZOO pic.twitter.com/JOnVCpB7JE
— CryptoZoo (@CryptoZooCo) May 5, 2022

Additionally, Paul had suggested the art for the game would be “handmade” by 10 different artists over six months.

The hybrids were the focus of a Sept. 11, 2021, video from Coffeezilla in which he described the images as “a bunch of stock photos from Adobe that have been poorly photoshopped.”

However, the CryptoZoo blog has not published any new content since April 20, prompting some to believe that the development of the project has halted.

During Coffeezilla’s three-part series about CryptoZoo, the YouTuber interviewed purported investors of the project. One investor who claimed to still be holding eggs called on the CryptoZoo team to “reimburse those loyal fans they have or try to rebuild the project.”

However, in his latest video, Paul said that they will “continue to build CryptoZoo,” sharing a teaser stating that it was coming in 2023/2024.

“Trust me, CryptoZoo is coming, I will make damn sure of it.”

Coffeezilla has continued to question the authenticity of these claims on Twitter.

Fear not CryptoZoo holders, who spent millions in 2021.
The basic game MIGHT be delivered in 2023/24!!!! and definitely not because I made a video series about it. pic.twitter.com/SQydiLrZjR
— Coffeezilla (@coffeebreak_YT) January 4, 2023

Meanwhile, both Paul and Coffeezilla have called on each other to discuss the matter on their respective platforms, but both have yet to accept any of the invitations.

According to CoinMarketCap, the Zoo token has plummeted by 99.5% over the past year, despite some gains within the last week following recent media attention.

Paul had been an avid supporter of crypto and NFTs throughout 2021 and was a major promoter of the crypto token Dink Doink (DINK) prior to launching CryptoZoo. Dink Doink was also lambasted by Coffeezilla in a July 12, 2021 video.

‘Smear campaign’: Nexo responds to accusations of stealing donations, siphoning funds from charity

June 27, 2022 Coin Telegraph

Cease and Desist

A pseudonymous Twitter account making a series of accusations against Nexo has caused the crypto lender to issue a cease and desist notice.

Cryptocurrency lending platform Nexo has hit back at what it called “fake news” and rumors that its founders were part of a charity embezzlement scandal, saying the claims are untrue and defamatory. It has issued a public cease and desist notice to the originator of the allegations.

In a blog post about the claims, Nexo stated:

“Several anonymous Twitter accounts are using lies and distortion in yet another smear campaign against Nexo and profiting from short positions in a distressed market.”

The pseudonymous Twitter account otteroooo, who calls themselves “Otter,” posted a series of tweets on June 25, claiming that Nexo’s co-founders stole funds from the Bulgarian charity HelpKarma to buy real estate and fund “lavish personal travel”.

NEXO FOUNDER & FAMILY SIPHONED FUNDS FROM CHARITY FOR SICK KIDS, USED DONATIONS AS PERSONAL SLUSH FUND, EVEN BUILT A PALACE FOR THEMSELVES

Evidences presented in full by otter below

no bueno!

— otteroooo (@otteroooo) June 26, 2022

The thread garnered a large audience on Twitter, with Otter sharing a screenshot that it had received over 9 million impressions, prompting Nexo to respond to what they say are “ludicrous allegations” and issue the cease and desist notice.

The central allegation Otter makes is that the founder of HelpKarma and co-founder of Nexo "Konsta Kanchev" used funds from donations to help build a palace instead of using the money for children's medical treatments.

Konsta Kanchev (Bulgarian Boy 1) embezzled the funds and went on to build a muthaf*ckin PALACE, "the size of a high school"

The money came from the donations of more than 130,000 Bulgarians who readily donated into what they thought was meant for medical treatment for children pic.twitter.com/NCd7TLbF4A
— otteroooo (@otteroooo) June 26, 2022

In a response by Nexo it points out that a “Konsta Kanchev” doesn’t exist and Otter deliberately made the name “to mimic a typo as an excuse to fact-checkers” by confusing two separate people, HelpKarma founder Constantine Krastev and Nexo co-founder Kosta Kantchev, as the same person.

Speaking to Cointelegraph regarding conflating the two, Otter shared a delisted article from the Bulgarian outlet Fakti saying the two are cousins and that Constantine in Bulgarian is spelled “Konstantin” but has since not provided further commentary.

Another major allegation Otter makes is that as HelpKarma's donations increased, the payday loans company Credissimo started to report considerable increases in its capital, citing a November 2020 report by Fakti, implying that the donations were used to fund Credissimo.

On how this scandal links to Nexo, Otter points out that Nexo's white paper says it's "powered by Credissimo." Credissimo was founded by Kantchev, and Nexo co-founders Georgi Shulev and Antoni Trenchev were the companies' business development and innovation officers, respectively.

In response to the claims, Nexo said that it and HelpKarma “have not and never had any common operations, common beneficial owners or common management,” adding:

“‘Why would a company with hundreds of millions in revenues and billions of assets under management, vetted by Fidelity, Mastercard and dozens of regulators ever have to resort to petty theft, let alone from children with medical needs?’ is the logical yet neglected question.”

Cointelegraph contacted Nexo for comment on the allegations and is yet to receive a response.

The main motive Nexo states as for why Otter posted the allegations is so that Otter can gain a large following and sell the account.

Nexo shared images of an individual who attempted to purchase Otter's account, to which Otter responds they want a minimum of $50,000 USD Coin (USDC) for it.

But in a Twitter thread posted by Otter on June 26, they claim they suspected the messages to be a “set up” to buy the account so that Nexo could silence them. They instead “hatched a troll plan” to sell the Otter account to collect Nexo’s “silence money” and make another account to “continue exposing them.”

Nexo says this isn’t the first time they’ve been part of what they call a “coordinated attack,” citing the 2020 accusations that it was behind Zeus Capital, an asset management firm that wanted to short Chainlink (LINK).

defamation

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