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A blockchain firm has sued Coinbase CEO Brian Armstrong, alleging that he stole their technology while passing it off as an investment.
Stolen Work Passed Off As Investment?
According to a lawsuit alleging that Coinbase committed fraud, its CEO took the work of a blockchain firm for a competitor project under the premise of a potential investment.
The lawsuit was filed on Friday in California by MouseBelt Labs, a blockchain accelerator, Coinbase CEO Brian Armstrong was designing a platform for publishing academic research that used tradable tokens when he learned of a similar platform called Knowledgr. According to the lawsuit, Armstrong’s ResearchHub, like Knowledgr, would reward participants with tokens akin to bitcoin.
Patrick Joyce worked on Knowledgr with MouseBelt’s technical and financial assistance. The accelerator had begun communicating with Joyce in 2018, but the two only signed all of the necessary agreements in May 2019 to begin working together.
At first, everything seemed to be going to plan. Joyce was on track to fulfill agreed objectives, and MouseBelt was staying on track to satisfy its contractual obligations.
In Armstrong’s article, “Ideas for Improving Scientific Research,” was published, he encouraged anyone interested in sharing ideas to contact him. Patrick Joyce was one of those who did.
Knowledgr drew Armstrong’s attention, and he provided a cash commitment as well as the opportunity to launch the tokens on Coinbase. Knowledgr agreed.
Armstrong, according to MouseBelt, didn’t want to assist to fund and grow Knowledgr, but rather take the latter’s idea and kill a competitor. In essence, MouseBelt claims that Coinbase plagiarized Knowledgr’s innovations and incorporated them into its own platform. According to the suit,
“It was the intention of Armstrong and the other defendants to steal MouseBelt’s work for themselves, not only to eliminate a potential competitor, but to secure for ResearchHub the benefits of the financial, design and technical resources that MouseBelt has. put into Knowledgr, allowing ResearchHub to launch earlier and more cheaply a successful platform based entirely or largely on the work of MouseBelt.”
Coinbase Currently trading at $238. Source: TradingView
Related article | Brian Armstrong Says China’s Digital Currency Is A Threat To U.S.
Armstrong Accused Of Playing A Power Game
Although Knowledgr was still in its early phases of development at the time, and Armstrong’s project was simply a concept, one thing is certain: ResearchHub is now up and running, whereas Knowledgr is not.
The lawsuit has elicited no public response from Coinbase. It remains to be seen how valid the lawsuit’s grounds are, and the exchange is expected to retaliate vehemently. Despite the fact that the exchange has been the subject of various scandals in the past, it has continued to develop.
Accusations of racism and a “company first” policy in the workplace have been two of Coinbase’s biggest controversies in the past. Some have criticized the latter for prohibiting difficult debates in the workplace, claiming that it was not in the spirit of decentralization.
Armstrong was also sued by the Securities and Exchange Commission (SEC) in September for a program that allows crypto investors to earn interest on their investments.
The lawsuit forced Armstrong to clarify the situation, according to The Washington Post. He revealed that the SEC classed Coinbase’s product as a sort of security that must be registered with the US government in a lengthy, 21-part Twitter conversation.
Related article | Coinbase IPO Will See Co-Founder Brian Armstrong Join The Ultra Rich
Featured Image From TechCrunch, Chart by TradingView
