Curve Investors Suing Founder Over “Deceptive Practices”

Reading Time: 2 minutes
  • Three VC firms behind Curve are suing its founder, Mikhail Egorov, for “deceptive practices”
  • The firms accuse Egorov of multiple crimes, including misappropriating trade secrets and withholding money
  • Egorov has filed to have the case dismissed, calling the claims “fiction”

Three venture capital firms which invested in DeFi platform curve are suing its founder, Mikhail Egorov, over a “brazen, multi-faceted scheme” to defraud them and enrich himself. The firms, ParaFi, Framework Ventures, and 1kx, claim that Egorov “misappropriated Plaintiffs’ trade secrets” while promising them that they would all benefit, when in fact Egorov has allegedly been the only one to have received the gains promised. Egorov’s defence team argues that the trio’s allegations are a spin-off of their ongoing litigation in Switzerland which was lodged in 2020 and claim the suit is a way to “justify their blatant forum shopping”.

Egorov Accused of Scamming Investors

According to the lawsuit, which was filed in April, Egorov devised the concept for Curve while working on crypto project NuCypher and developed a small-scale prototype. He solicited investment on the back of this and secured funds from the three VC firms who saw “a unique and potentially profitable opportunity to help develop a highly successful automated market-maker.”

The firms allege that Egorov made false statements regarding the manner in which their assets would be deployed and then used their funds for his own means, saying that he misused the investments to “artificially increase the value and legitimacy of the Curve platform, deny Plaintiffs their promised shares in Curve’s operating company, and, ultimately, shut them out of the project altogether, so that he could keep the lucrative opportunity created by Plaintiffs’ contributions for himself, in addition to keeping Plaintiffs’ money.”

Egorov Dismisses “Tale of Woe”

According to Egorov, the three have decided to file in the US because their Swiss case, lodged three years ago, is going nowhere. He says that the firms have “concocted a new and compelling story painting Egorov as an evil villain who duped three naïve VC firms into giving up ‘trade secrets’ and $1 million in invested funds.”

They refer to the picture painted by the firms as a “tale of woe” which they dismiss as “fiction”, adding that it is “nothing more than a clever narrative fabricated to save plaintiffs’ floundering Swiss litigation yet undermined by records that plaintiffs themselves cite.”

Egorov filed a motion to dismiss the case in May, with the judge’s ruling expected soon.