Bitcoin Mining Company, Layer1, Founders Go to Court Over $20M Power Plant Ownership
According to reports, Jakov Dolic, who co-founded the Bitcoin mining firm Layer1 Technologies, has sued his former business partner Alexander Liegl for failure to raise funds for Layer1.
A court document was filed against Liegl on October 30th, claiming he failed to meet their legal agreement to raise $50 million from investors for the startup. As a result, Dolic wants Liegl to pay $16.24 million to buy a power plant for the crypto mining company.
According to the complaint, the only source of capital for the Layer1 project was made by Dolic, and that Liegl had not contributed in any way to the funding of Layer1.
“Other than Dolic’s contributions, Layer1 had no source of income or capital,” the complaint reads.
The complaint also alleged Liegl had not raised money from venture capitalists or contributed any money from his personal belongings towards the development of the Layer1 company.
Dolic has been involved in a similar case in the past.
The case against Liegl is not the first one Dolic has been involved in the crypto industry. In September last year, Genesis Mining, co-founded by Dolic, was sued by London-based payment firm Digital Capital.
In the case, Genesis Mining was accused of not paying the plaintiff for developing and maintaining its credit card software, with the company's unpaid invoices amounting to $3.1 million.
However, Genesis Mining countered Digital Capital’s claims, reporting that the company provided only peripheral functionality for the card, which is not what had been legally agreed upon.
Layer1 announced in October last year that it had raised about $50 million with significant support from Peter Thiel and Shasta ventures. But a subsequent report revealed that the actual funds raised were $23 million at the time, and it was raised only by its funding team.
In the suit, Dolic asserted that even though Liegl has not contributed to the funding, he is not making use of the funds appropriately. Dolic also says he recently learned Liegl was paying himself consultation fees without his authorization or knowledge.
Reclaiming rights to properties
Apart from the $16.24 million spent, Dolic said he also spent an additional $3.5 million to expand its power facility. According to Dolic, both agreed that Leigl would refund him the money he had spent on the power plant expansion.
Based on the allegation, while Liegl took the company's legal ownership, Dolic has not received anything for his investment.
Additionally, Dolic claims that the company they both funded is facing serious financial problems and his personal funding is not enough to keep the company afloat.
The lawsuit stated that although Layer1 technically has ownership of the title, Dolic wants to assert his rights to the properties he bought from the seller since its co-founder doesn’t have any financial contribution made on the properties.
However, Liegl has responded by saying that most of the allegations against him in the lawsuit are categorically and demonstrably false. He said for making false allegations without any reasonable base; the company will respond quickly and take legal actions against Dolic.