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An former partner of Stake.com who claims he was excluded from the wildly successful company is suing the Australian creators of the largest bitcoin casino in the world in the US for $US400 million in damages.
However, the creators of Stake.com, Ed Craven and Bijan Tehrani, who just bought the most expensive home in Melbourne, have called the lawsuit “utterly frivolous” and “provably false.”
Stake.com Is $1 Billion Operation
The cryptocurrency casino Stake.com, which was thought to be an overseas operation, was actually formed in Melbourne in 2017 by Craven and Tehrani, according to a late 2021 investigation by The Age and Sydney Morning Herald.
With Canadian pop artist Drake serving as its major brand ambassador, Stake.com, the lead shirt sponsor of English Premier League soccer team Everton, has grown into a company with a potential market value of up to $1 billion.
Craven recently made news in Australia when he paid $80 million for a Toorak home, shattering the city’s previous record. A other Toorak property was purchased for $38 million earlier this year by entities connected to Craven.
Christopher Freeman, who is currently based in Florida, has filed a civil lawsuit in the Southern District of New York, claiming he was misled into not taking part in the creation of Stake.com and is seeking $US400 million ($580 million) in punitive damages as well as payment for his initial investment in a company that served as a precursor to Stake.com.
The case also names Stake.com as a defendant. Lawyers for the company referred to the accusations as “frivolous” and “provably false” in a statement. If the action was not dismissed from court, it stated that it will defend the claim.
The allegation made by Freeman cites Craven’s real estate acquisitions as proof of Stake.com’s enormous success. The casino claims to have processed $US100 billion in bets across its casino and sports betting companies, yet it runs very similarly to a typical casino and only accepts cryptocurrencies as payment.
Freeman claims in his court case that he went to elementary and high school in Connecticut with Tehrani and was friends with the Stake.com founder since they were little children.
A Breakdown Of Event
In the beginning, according to Freeman, he owned 20% of Primedice while Tehrani and Craven each owned 40%, a situation that reflected their first investment in the company.
Within nine months of Primedice’s founding, Freeman claims that his stock was lowered to 14% in order to compensate other key members of the development team.
Freeman claims that despite the trio’s agreement that Primedice would only grant stock to persons who have invested money in the company, this share transfer nonetheless took place.
As the value of cryptocurrencies increased, Freeman claims that in 2016, he discussed the concept of a cryptocurrency casino with his business partners, but Tehrani and Craven allegedly turned him down because of potential regulatory concerns.
Freeman claims he was discouraged from joining Tehrani and Craven’s claimed new enterprise, Stake.com, in the same year after being informed he could only take part if he relocated to Australia and that the new business would only deal in fiat currencies like the US dollar or the Euro.
BTC/USD trades at $20k. Source: TradingView
According to court documents, “Freeman, who was committed to and at ease with the concepts of online gambling, believed a fiat money casino was the wrong direction to go (online gaming facilitated by fiat is a widespread, big business)”.
“He reasoned it was highly competitive and presented personal risks which he was not prepared to accept, and he did not want to be forced to move to Australia to pursue a fiat-based gambling business”.
Freeman claims that Tehrani and Craven started their bitcoin casino Stake.com despite their prior comments that it would be too expensive to operate one and worries about regulation.
He further claims that after questioning Tehrani and Craven, the two gave him guarantees before taking away his system access.
“Later, when Stake.com launched as a virtual casino which included a competing online dice game and many other features Freeman had proposed and helped design, Tehrani and Craven affirmatively tried to assuage Freeman’s dismay at having been misled by affirming that he still retained his stake in Primedice.”
“Eventually, Freeman’s access to the Primedice account was blocked and never returned.”
Stake.com said in a statement:
“The complaint filed by Chris Freeman contains allegations that are internally inconsistent, intentionally misleading, and provably false.” The company described the claim as a “desperate attempt to spread false information”, adding Freeman had no claim to the money he said he was owed.
Featured image from UnSplash and chart from TradingView.com