Ava Labs denies ‘conspiracy’ alleging overpaid lawyers to sue competitors
- A new report from Crypto Leaks claims that Ava Labs paid Roche Freedman to attack its competitors and keep regulators at bay.
- Roche Freedman’s founder, Kyle Roche, appears to claim that he received AVAX tokens and Ava Labs shares as part of a secret scheme to aid the project.
- Ava Labs founder and CEO Emin Gün Sirer has described the piece as “conspiracy theory nonsense.”
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Ava Labs founder and CEO Emin Gün Sirer took to Twitter to deny the allegations presented in the article.
Crypto Leaks Allege Secret Link Between Ava Labs and Roche Freedman
Avalanche has found itself at the center of crypto’s latest major drama.
An August 26 report from the crypto “whistleblower” Crypto leaks claims that Layer 1 blockchain’s development company, Ava Labs, allocated about 1% of the AVAX token supply and Ava Labs stock to the law firm Roche Freedman as payment for the firm to arrange lawsuits and class actions against some of its competitors.
Roche Freedman is a law firm known for its various businesses in the crypto area; it recently sued Binance.US for Terra’s collapse and filed suit against Solana Labs, claiming that SOL was an illegal security.
Among the claims laid out in the Crypto leaks report, several videos appear to show founding partner Kyle Roche claiming Roche Freedman was paid to support Ava Labs and attack its competitors, including Dfinity and Solana. In the videos, the subject, reported to be Roche, appears to claim that he reached an agreement with Ava Labs in September 2019 and was the first recipient of Ava Labs stock after Andreessen Horowitz. “We made a deal where I agreed to provide legal services in exchange for a certain percentage of the token supply … that was September 2019,” he says.
The Observer goes on to claim that he was “around a point” in tokens and equity, likely referring to a percentage point. According to the subject, his award represented about a third of Ava Labs co-founder and chief operating officer Kevin Sekniqi’s award.
He then describes litigation as “an underused tool”, to which the undercover agent in the video replies “you use” [litigation] as a strategic instrument to support Ava Labs.” “Correct,” he replies. In the clips, the Observer also claims that he is currently living with Sekniqi.
The observer later says that he has inside knowledge of how the crypto room works. “Because I sue half the companies in this area, I know where the market is going,” he says. He later claims that Roche Freedman’s lawsuit has served as a distraction for US regulators, drawing attention away from Ava Labs. “They haven’t been sued yet, and there’s a reason for that,” he says. “I’m working to make sure the SEC and CFTC have other magnets to go after.” He also adds that he has helped ensure that there is “no such thing as regulation” for Ava Labs.
Gün Sirer speaks out
The Crypto leaks piece did the rounds on Crypto Twitter over the weekend. Several prominent crypto personalities addressed it late Sunday, prompting Ava Labs founder and CEO Emin Gün Sirer to speak out on Twitter. “How could anyone believe something as ridiculous as the conspiracy theory nonsense on Cryptoleaks? We would never engage in the illegal, unethical and downright crazy behavior alleged in these self-serving videos and inflammatory article,” wrote. “Our technology and team speak for themselves.”
How could anyone believe something as ridiculous as the conspiracy theory nonsense on Cryptoleaks? We would never engage in the illegal, unethical and downright crazy behavior alleged in these self-serving videos and inflammatory article. Our technology and team speak for themselves.
— Emin Gün Sirer🔺 (@el33th4xor) 28 August 2022
Sekniqi, meanwhile, so that the report was “stupidity to the max mega giga level written by an ICP conspiracy site.”
Binance CEO Changpeng Zhao also weighed in, describes the claims that “would”.
Roche Freedman’s LinkedIn account does not mention Ava Labs, and there is no public record from either party confirming their relationship.
Interestingly, however, Gün Sirer has previously described Roche Freedman as “top notch” and the Avalanche’s official Twitter account is one of its 627 followers. Avalanche, Gün Sirer and Sekniqi all follow Roche’s account.
Avalanche was one of several Layer 1 networks that experienced a meteoric rise during the 2021 crypto rally, fueled by skyrocketing gas fees on Ethereum and a nine-figure surge led by Polychain Capital and now-bankrupt hedge fund Three Arrows Capital. It peaked at just under $145 in November 2021, but has since suffered from the crypto slump. It took an 8.6% hit on today’s rumours, currently trading at around $18.42.
Crypto Briefing contacted Ava Labs and Roche Freedman for an official statement, but had not received a response by press time.
This story is developing and will be updated as more details emerge.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.