The lawsuit, filed in April, also alleges that Egorov moved to Switzerland to insulate himself from the inevitable legal fallout, and The case against Egorov amounts to ‘nothing more than a clever narrative,’ his attorneys said. Michael Egorov, the CEO of decentralized finance (DeFi) firm Curve Finance, is facing a lawsuit for fraud from venture capital firms ParaFi Capital, Framework Ventures, and 1kx. The complaint, filed in the Superior Court of California, San Francisco, alleges Egorov misappropriated trade secrets of the three VC firms, and defrauded them out of close to $1 million in funds while falsely promising a stake in Curve.
The three firms have been pursuing a breach-of-contract case in Switzerland against Egorov and his company Swiss Stake since 2020. Curve Finance is a decentralized exchange built on the Ethereum blockchain, and is currently one of the biggest DeFi trading platforms, with some $4.07 billion in total locked value, according to DeFi Llama.
The VCs allege Egorov misappropriated their trade secrets, including information that proved to be critical to the development of Curve, such as key industry contacts, potential investors, and knowledge of how to manage an investment round – all while falsely promising that Plaintiffs would benefit from the fruits of their labor, not just Egorov. They also claim Egorov offered to sell shares of Swiss Stake to them for close to $1 million, but had no intention of transferring shares of Swiss Stake.
Egorov’s lawyers have argued that the allegations of fraud derive from the termination of a contract between the VCs and Swiss Stake, and that the trade secrets in question were really the names of widely known investors. They also claim Swiss Stake promptly offered to return the roughly $1 million of invested funds.
Law firm Latham & Watkins, representing the three VC firms, said in a statement: It is regrettable that this has reached the point of litigation, but we strongly believe the facts are on our side. In that respect, the complaint speaks for itself. Our clients are resolved to seek full accountability of Michael Egorov for his behavior.