Augur (REP) Faces The Largest Lawsuit To Date Within The Cryptoverse
Augur, a decentralized, peer-to-peer prediction market based on the Ethereum blockchain, has been placed in a heated situation, as Matthew Liston, a former Augur member, takes four of his acquaintances to court. As for the hearing, it has been scheduled for September 2018.
In particular, he contended that investors and founding members, Joseph Ball Costello, Jack Peterson, Joseph Charles and Jeremy Gardner have deceived him and breached their contract after Liston was asked to step down from the company. Furthermore, according to his story, he was left with nothing to call his own, including his contributions in Augur’s token distribution. The two parties had a different perspective of the story to share, as one alleges he faced trauma, while the others simply denounced it as being false.
The lawsuit named, “Matthew Liston v. Jack Peterson, et. Al” is very detailed and blames the four acquaintances for the damage Liston had to face. Some of the points mentioned include:
- Forcing and intimidating Liston into signing a settlement agreement that was not followed on Peterson’s end.
- Failing to recognize Liston as a Co-Founder of Augur
- Suggesting, Dyffy Inc., as a suspect for not paying Liston his complete wages
- Naming two Forecast Foundation Businesses for illegally operating in California
- Stealing Liston’s holdings at Dyffy
- Moving financial assets from Augur to Oregonian Forecasting Foundation, which was not legitimate at the time
Liston is seeking compensation for the losses he incurred as well as not being able to accredit himself of the title that he was stripped of. Hence, he is supposedly asking for $152 million in collective damages, of which $32 million in general and approximately $114 million in disciplinary damages. This is definitely one of the biggest topics discussed in the cryptoverse as other lawsuits were not even as severe compared to Liston’s.
In response to Liston’s claims, Krug, a current Augur advisor stated that everything mentioned was false. He went on to say that Liston,
“accepted a cash severance payment and he signed a full release with Dyffy, and we’re appalled that he’s turned around with a lawsuit three years later.”
So How Does The Story Go…
Problems were believed to have stemmed some time in 2014, when Liston registered Dyffy, the Delaware company and made his first hire: Peterson. Based on the lawsuit, Liston had keen interest in using blockchain technology to come up with better predictions, however Peterson was not too comfortable with the idea. Later, after the help another developer, Peterson joined onboard.
Liston grew more and more confident after coming across the “Truecoin whitepaper”, written by Paul Sztorc. Soon enough, he discussed the idea of implementing it to the Augur coin REP, to Costello and urged Peterson to bring him into talking with Sztorc himself. Eventually, Costello took on the role of the shareholder and Peterson, CTO of Dyffy under Liston’s influence. To support the claim made here, Sztorc himself made a statement in which he explicitly said Liston to have not only found him but also to have proposed the project altogether.
After getting everyone onboard, Liston claims to have hired Krug, Gardner and Zachary Hess (software engineer). The lawsuit claims that problems in relation to “technological and commercial vision” was formed.
Due to the fact that everyone was not getting along, on October of 2014, Peterson and Costello made the decision to remove Liston from the company and the board of directors. Soon after he left, Krug took on his position as director and Peterson switched around from CTO to CEO. Eventually the not-for-profit, Oregonian Forecast Foundation made its way in December of the same year.
Based on Liston’s perspective, several financial facets of Augur, as well as his own stakes from Dyffy were moved into the Oregonian Forecast Foundation. He further believes that the move was illegal, as he still held ownership of Dyffy and that the Oregonian Forecast Foundation was neither licensed nor registered in California.
There’s More To It…
Liston’s claims on Dyffy did not necessary return to his favor, as he still owed $15,000 for services unpaid after his elimination from the company. However, he rebutted saying that it was the four men’s responsibility to overlook any due payments.
As previously mentioned, Liston claims to have been verbally and textually abused and forced by Costello into signing a prepared deal. The deal stated that Liston could not take future legal action against Dyffy as well as giving Liston REP tokens in place of his Dyffy shares.
Based on what was provided in the lawsuit, Costello was apparently dealing with this settlement in “a series of highly coercive, unrelenting, manipulative communications” that resulted in “abusive” phone calls. This went on for two days, where Liston felt weak and feared that he would be left with nothing, so he signed off the deal.
Liston later realized that the Augur team downplayed the potential its Initial Coin Offerings would have and missed every crucial data that should have been made visible in the negotiations. He also stated that the manner in which he had to accept the deal was unjust – suggesting that him signing should not be considered legitimate at all.
The Major Problem At Hand…
Based on the lawsuit, Peterson refused to acknowledge Liston as the Co-Founder of Augur, which was something that both agreed on and was apparently written. While Costello was aware of the agreement, Peterson did not want to go along with it. The suit further quoted that he “blocked all potential press releases and rejected all public media statements” related to the Initial Coin Offering.
Peterson did not stop and stood firmly with his belief that Liston was not a co-founder. He even went on wreck Liston’s later endeavours after having left Dyffy. In particular, he called his bosses and “try to convince him to lean on Plaintiff Liston to stop referring himself as a co-founder of Augur.”
The harassment continued with the different jobs Liston took on, another example being that of FOAM’s CEO, Ryan John King. The suit suggested that an Augur employee emailed King, “using aggressive and disparaging language demanding that FOAM remove the phrase ‘Augur cofounder’ from Liston’s description on FOAM’s website.”
Whose Side Holds the Truth…
For now, the four members who are being taken to court have yet to disclose any further statements regarding the lawsuit, including the lawyer representing them. However, Sztorc, responsible for the Truecoin whitepaper, spoke with CoinDesk and expressed pity of Liston’s situation, as he had personal troubles in the time of his firing.
Sztorc openly stated that Liston was not the only one to have been unethically treated and suggested that Hess, who worked long hours, was not compensated for what he truly deserves.
Sztorc also mentioned a conversation he had with Costello at the time, where Costello asked him for suggestions. Apparently Szctorc said “it needed programmers. Matt [Liston] wasn’t really a programmer.”
The reason for the rise of disputes have not been disclosed as of yet, however, an insider believes that it all could have started with Liston wanting to create Augur’s REP tokens on the Ethereum blockchain as opposed to Bitcoin’s. Today, Augur is on the Ethereum blockchain and the insider said, “[Liston] ended up being right.”
For the time being, it is too soon to come to a conclusion as to how this all might play out. This is mainly because the four men that the lawsuit is being directed towards have yet to tell their stories. Will Liston finally be able to consider himself as “co-founder of Augur” without any troubles attached? The wait will have to continue until September 2018.