Michael Egorov, the CEO of decentralized finance (DeFi) firm Curve Finance, is being sued by venture capital firms ParaFi Capital, Framework Ventures, and 1kx for allegations of fraud.
A complaint lodged in the Superior Court of California, San Francisco, claims that Egorov misappropriated trade secrets from the three VC firms and deceived them into investing nearly $1 million by falsely promising them a potential stake in Curve. The lawsuit, filed in April, further alleges that Egorov relocated to Switzerland in an attempt to evade legal consequences. The three firms have been pursuing a breach-of-contract case against Egorov and his company Swiss Stake in Switzerland since 2020.
According to the complaint, starting in early 2020, Framework Ventures, ParaFi Capital, and 1kx assert that Egorov engaged in an audacious, multifaceted scheme to defraud them over a span of six months. The VCs also claim that Egorov misappropriated their trade secrets, including crucial information for Curve’s development, such as industry contacts, potential investors, and insights on managing investment rounds, all while falsely promising the plaintiffs benefits from their collaboration.
The VCs further allege that Egorov offered to sell shares of Swiss Stake to the plaintiffs for approximately $1 million, with $925,233.54 worth of USDC sent to a wallet specified by Egorov. However, they claim that Egorov had no intention of transferring the Swiss Stake shares to the firms.
Egorov’s legal representatives stated in a filing on May 22 that the fraud allegations stemmed from the termination of a contract between the VCs and Swiss Stake. They argued that the so-called “trade secrets” were actually the names of widely known investors. Additionally, they contended that Swiss Stake promptly offered to return the invested funds.
In a response, Egorov’s lawyers characterized the case against him as a fabricated narrative and accused the plaintiffs of forum shopping. They argued that the allegations amounted to nothing more than a clever story and refuted the portrayal of Egorov as an “evil villain” who deceived the three VC firms.
About Curve Finance
Curve Finance, an Ethereum-based decentralized exchange, stands as one of the largest trading platforms in the realm of decentralized finance (DeFi), boasting a total locked value of approximately $4.07 billion, as reported by DeFi Llama. Functioning as a decentralized autonomous organization (DAO), Curve Finance is governed by the CRV token, which can be acquired through purchase or earned by providing liquidity to Curve’s pools.