$152 Million Augur (REP) CoFounder Lawsuit Dismissed, Settled Out of Court
The Largest Lawsuit To Date Within The Cryptoverse Comes To An End
In May 2018, BitcoinExchangeGuide reported that Augur was involved in the biggest lawsuit in the crypto ecosystem. On Oct 12th it revealed that the lawsuit has come to an end as court records show that the case was dismissed.
Details About The Lawsuit
In a lawsuit filed in San Francisco County, California on April 19, Matthew Liston has alleged that angel investor Joseph Ball “Joe” Costello, age 64, and three other founding members of Augur, Jack “John” Peterson, 35, Joseph Charles “Joey” Krug, 22, and Jeremy Gardner, 26, committed acts of fraud, breach of contract and trade theft that left him empty-handed without a stake in the company's initial coin offering (ICO) — a tokenized form of crowdsourced fundraising — and bound to a broken settlement agreement that failed to acknowledge him as a co-founder.
Named as defendants in the lawsuit are also Augur's Delaware corporate entity Dyffy, Inc. for failing to pay Liston back wages owed and two Forecast Foundation business entities, one registered in Oregon and the other in Estonia, for operating illegally in the state of California, misappropriating Liston's holdings from Dyffy and processing the ICO transactions without registering them as securities.
According to the lawsuit, Peterson, Gardner, and Costello conducted a hostile takeover of Dyffy, Gardner presided as president and Peterson as secretary over the dissolved Oregon non-profit, and all but Costello currently maintain shareholder status in the for-profit Estonian entity with Peterson at the helm.
The entities were made before Augur held one of the first ICOs between August 7 and September 5, 2015, the lawsuit says, when the company issued 8.8 million reputations (REP) tokens, each priced below $0.60, to raise over $5 million for a decentralized prediction market protocol that would run on the ethereum blockchain.
The legal action also constitutes the most financially significant private lawsuit in cryptocurrency history so far, superseding even damages sought by industry class-action lawsuits brought against cryptocurrency exchange Coinbase, the Nano cryptocurrency previously known as RaiBlocks, and token-backed marijuana startup Paragon Coin, which have exceeded more than $100 million in possible payouts.
The most recent court records show that the court of California in San Francisco County has ordered to take the case management conference “off the calendar,” after O. Shane Balloun of Balloun Law requested to dismiss the case “with prejudice,” on behalf of Liston, meaning that they would have the case dismissed permanently.
Another court record published on Sept. 6 indicates that negotiations on a settlement were in progress.
“The parties have reached a settlement in principle and are working diligently to finalize a written settlement agreement,” the document wrote.
As a project built upon on the ethereum blockchain that allows its users to bet on outcomes of real-world events, Augur has received wide attention since its inception.
It is advised by ethereum co-founder Vitalik Buterin and the co-founder of Lightning Labs, Elizabeth Stark. The project was officially launched in July and is expected to have some major updates released soon.