A group of investors has taken legal action against Jonathan Mills, founder of the Hashling NFT project, alleging he diverted millions of dollars from the venture and a linked Bitcoin mining operation for personal gain.
The lawsuit, filed in Illinois on 14 May, accuses Mills of fraud and breach of fiduciary duty after failing to deliver promised returns to his backers.
According to court papers, investors pooled $1.46 million through two NFT sales launched on the Solana and Bitcoin blockchains, yet none of the promised dividends ever reached them.
Instead, they say, Mills moved funds—including at least $3 million from the Bitcoin mining enterprise—into a holding company under his control, Satoshi Labs LLC, formerly Proof of Work Labs LLC, where Mills holds the roles of founder and CEO.
The plaintiffs describe Mills’ behaviour as evasive, claiming he stopped responding to inquiries shortly after securing their investments.
They further claim he engineered a flawed shareholder agreement filled with inconsistencies designed to give himself overwhelming control.
Under this agreement, Mills secured a 67% equity stake and voting power in the company, leaving other investors with mere 2% shares despite individual contributions reaching up to $20,000.
The investors contend the shareholder agreement was created to justify Mills’ control over the project’s assets, describing it as “rife with errors” and falsely positioning Satoshi Labs as the rightful controller.
Mills allegedly assured investors their equity stakes would remain intact even after the company’s name changed from Proof of Work Labs to Satoshi Labs, a move the plaintiffs say was part of maintaining his dominant position.
The Hashling NFT project began as a collaboration between Mills and Dustin Steerman, one of the plaintiffs who had previous experience working with Mills.
Steerman noted that Mills openly admitted to having little money and no experience in NFTs at the outset.
However, Mills showed a strong willingness to drive the project forward.
Clinton Ind, the attorney representing the investors, noted,
“[Mills] had a willingness to help push the project forward, and he did have an idea at the start. Even though that wasn't the final idea, it did embolden it, and … everyone kind of enjoyed working together in those early stages.”
To advance the venture, Mills and Steerman brought in additional investors to contribute expertise ranging from NFT artwork and social media marketing to attending industry events such as NFT conferences in New York.
The plaintiffs also claim Mills convinced his girlfriend to invest in the project, though details remain limited.
Beyond allegations of fraud and breach of fiduciary responsibility, the investors are pushing for a constructive trust over the project’s assets.
This legal tool would place the assets under court supervision, ensuring they are protected while the case unfolds.
The plaintiffs also seek full restitution to recover their financial losses.
Attempts to reach Mills for comment have so far been unsuccessful, leaving the allegations unanswered as the legal process proceeds.
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