ParaFi, Framework Ventures and 1kx Sue Curve Founder for Fraud and Handling Trade Secrets

According to DL News, three VCs, ParaFi Capital, Framework Ventures, and 1kx, sued Curve founder Michael Egorov for allegedly participating in fraudulent activities and handling trade secrets, causing financial losses to him. The three companies invested $1 million in Curve in 2020, after which Michael Egorov deposited the investment into Curve’s liquidity pool, and the three VCs received neither CRV tokens nor refunds. Plaintiff Michael Egorov conceived the Curve concept and developed a small prototype while employed by NuCypher in the United States, according to the lawsuit. To scale Curve, Michael Egorov needed VC investment and introduced his idea to these three VCs. The plaintiffs are all users of the Curve platform and have also decided to invest in Swiss Stake. Michael Egorov needs funds and the legitimacy provided by the California DeFi venture fund to start his project, and then sells his assets in the company Swiss Stake GmbH, which holds a Curve license. Misrepresentation was made about how it was deployed. Egorov convinced venture capital firms that their assets would be used to hire developers, lawyers and other staff. However, Egorov had no intention of relinquishing control of Curve, locked up more CRV than he had anticipated, and instead of handing over power to the Curve DAO, Egorov sold enough CRV tokens to generate a profit while maintaining overwhelming control right. The suit alleges that Egorov enriched himself fraudulently by depositing Plaintiff’s funds into Curve’s liquidity pool, receiving CRV tokens and fees as an incentive for providing liquidity, and selling millions of dollars’ worth of CRV Tokens (Plaintiff argue that these tokens belong to them). The three VCs said they did not receive the promised Swiss Stake, that their nearly $1 million in funds were never returned, and that they never received the tens of millions of dollars worth of CRV they claimed they were entitled to. Michael Egorov's defense team argued that the allegations made by the three VCs in the San Francisco court are the result of their ongoing lawsuit filed in Switzerland in 2020.