Ex-exec alleges firm diverted stablecoin venture, files lawsuit over fiduciary breach

A former govt at crypto consultancy RWA Firm has filed a lawsuit accusing the corporate of wrongfully terminating his contract to take management of a profitable stablecoin mission turned blockchain fee infrastructure platform M0.

Max Glass sued RWA within the Delaware Chancery Courtroom, alleging that RWA’s controlling members, Gregory DiPrisco and Joseph Quintilian, orchestrated a “fiduciary betrayal” to pressure him out and take possession of the corporate’s stablecoin enterprise with out his involvement or consent.

In keeping with Glass, the 2 executives “compelled him to surrender his rights” earlier than launching a separate enterprise that later turned M0, in violation of their contractual obligations to him and the corporate.

As a former director, he was ‘misled’ by RWA Firm

In its authorized criticism, Glass accuses DiPrisco and Quintilian of participating in “a scheme of coercion, fraudulent inducement, and subsequent breaches of fiduciary obligation,” alleging that they intentionally misled him to realize management of the corporate’s mental properties and partnerships.

He said that the pair diverted RWA’s deliberate stablecoin mission, developed in partnership with German fintech startup CrossLend GmbH, into a brand new entity that finally turned M0.

M0 is just not itself a stablecoin issuer like Tether or Circle, nevertheless it supplies the infrastructure that has created a number of multi-million greenback stablecoin tasks, together with MetaMask’s mUSD.

“The M0 Firm is constructed on the RWA Co.-CrossLend relationship,” Glass said within the submitting, additionally alleging that he was unfairly excluded from the constructive facet of the mission that stemmed straight from his work on the RWA Firm.

CrossLend is a Berlin-based fintech firm that digitizes and standardizes mortgage and mortgage information. Whereas not a crypto-native firm, Glass emphasizes that RWA’s partnership with CrossLend was supposed to create a stablecoin product backed by tokenized real-world property.

Nonetheless, he claims that his former companions used this partnership to quietly construct a brand new firm beneath a special title, excluding him from the corporate’s possession and future income.

Glass’ attorneys consider there was a “sample of concealment” from the defendants for years, saying the defendants hid the connection between RWA, CrossLend and M0. He’s searching for unspecified damages, restitution, and recognition of his possession pursuits associated to RWA’s authentic stablecoin mission.

M0 fundraising in August

M0 has been one of many extra outstanding gamers within the digital funds business because it turned a distributed platform that helped establishments challenge custom-made stablecoins utilizing its underlying protocol.

Very totally different from centralized issuers like Circle’s USDC, which by no means realized its plan to deliver service suppliers beneath its Middle Consortium, M0’s permits totally different entities to challenge their very own stablecoins beneath a shared customary. Every issuer can “bundle” the bottom M0 coin with its personal options for differentiation and customization.

In only one 12 months since launch, M0 has enabled the creation of 4 energetic stablecoins with a mixed issuance of $325 million. The corporate Closed a $40 million Sequence B financing spherical in late August, led by Polychain Capital, Ribbit Capital and Endeavor Catalyst.

The M0 fundraisers raised a complete of $100 million because of contributions from Wintermute Ventures, ParaFi Capital, HackVC, Galaxy, Anthony Scaramucci’s SALT and Bain Capital. CEO Luca Prosperi stated the platform gives “higher autonomy” for fintech builders preferring to make use of the US greenback in digital type.

“We wish to allow the builders of nice fintech merchandise to really take management of the digital greenback stack they use. Present stablecoin expertise is just not match for that function,” he claimed.

The stablecoin market is now valued at round $308 billion and will surpass $1 trillion in market capitalization by the top of the last decade, based on business forecasts.

Nonetheless, the European monetary watchdog ESRB (European Systemic Threat Board) is to ask regulators to “tightly” implement the European Union’s Markets in Crypto-Belongings (MiCA) framework.

The ESRB’s report printed final month discovered that stablecoins Tether’s USDT and Circle’s USDC are collectively backed by roughly $129 billion in bonds. It believes that beneath harassed circumstances, huge redemptions may set off a ‘financial institution run’ state of affairs, with issuers compelled to liquidate their reserves, which may destabilize bond markets.