The founder of Curve, who swallowed coins to buy luxury houses, was jointly sued by three major crypto VCs

Original Author: 0xmin Compilation: Deep Tide TechFlow

The encryption world needs more judges. After the SEC sued Binance, encryption VCs also started their litigation journey.

According to DL News, recently, three well-known crypto VCs, ParaFi, Framework Ventures and 1kx sued Curve founder Michael Egorov in San Francisco for commercial fraud.

You may be familiar with this name. Recently, Michael Egorov and his wife Anna Egorov spent $41 million to buy Avon Court, a mansion in Melbourne, setting a record for the highest single property transaction in Victoria during the year. In March last year, the Egorov couple also bought an Italian-style mansion in the local area for US$18.25 million.

The crypto bear market did not affect Michael Egorov's spending like water at all, but ParaFi, Framework Ventures and 1kx three VCs said that they once invested $1 million in Curve, but now they can't get any commercial returns.

Get to know Michael Egorov first.

He is a Russian. He obtained a bachelor's degree in applied mathematics and physics from the Moscow Institute of Physics and Technology, and later went to Australia to obtain a doctorate in physics from Swinburne University of Technology, and a postdoctoral degree in physics from Monash University.

In 2013, he came into contact with Bitcoin; in 2015, he left LinkedIn to start a business, co-founded NuCypher, a blockchain privacy project, and served as CTO. In 2016, the project received a seed round investment from Y Combinator, and later received investment from well-known encryption VCs such as Polychain.

During his work at NuCypher, Egorov started developing Curve in the second half of 2019 because of MakerDAO's inspirational thinking, and until June 2020, he officially left NuCypher. June 2020 Michael Egorov left NuCypher, All in Curve.

In order to expand Curve, Michael Egorov needs VC investment. On the one hand, it is capital, and on the other hand, it is the orthodox endorsement from well-known venture funds in the DeFi field. Therefore, Egorov contacted three VCs, ParaFi, Framework Ventures and 1kx.

In the end, the three VCs chose to invest in Egorov’s Swiss Stake GmbH, an operating entity registered in Switzerland. Egorov said at the time that their assets would be used to hire developers, lawyers and other employees.

Now, VCs are suing that Egorov has no intention of giving up his control of Curve. He locked up more CRV, Curve’s governance token, than expected. Instead of handing over power to Curve DAO, Egorov sold enough more CRV tokens, gain profits while maintaining overwhelming control.

“Egorov has made a fortune from his fraud,” the lawsuit states, “for depositing funds that would have belonged to Plaintiff into Curve’s liquidity pool, Egorov has received a substantial amount of CRV tokens and fees as a means of providing liquidity. award."

The fundamental problem, of course, is that VCs are not getting their fair share of benefits, with VCs claiming that they did not receive the promised Swiss Stake, that their nearly $1 million in funding was never returned, and that they never Receive thousands of dollars worth of CRV to which they are entitled.

Egorov has sold tens of millions of dollars in CRV tokens that VCs believe belonged to them. In addition, VCs also said that they also missed the business opportunity to invest in Curve's competitors.