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The judge dismissed the suit against Egorov, saying that since the CEO does not live in California, the case should be handled elsewhere.
A California judge has dismissed a lawsuit against Michael Egorov, the CEO of decentralized finance (DeFi) platform curve finance, The judge dismissed the case in part because Egorov was not a resident of California at the time of the alleged allegations.
In Wednesday’s order, Judge Richard B. Ulmer Jr. said Egorov last lived in California in 2018. This means California does not have jurisdiction over the case.
In June, three DeFi-focused VC firms filed a lawsuit against Egorov in the Superior Court of California in San Francisco. According to 1kx, Framework Ventures and Parafi Capital, Egorov misappropriated the firms’ trade secrets, defrauding them of approximately $1 million. The plaintiffs allege that Egorov gained their confidence by misrepresenting that they could acquire a stake in Curve.
Egorov trial begins in Switzerland
The California lawsuit is not the companies’ first attempt to go after Egorov. The firms filed a breach of contract lawsuit against the CEO and his Swiss stake company in Switzerland in 2020. In the lawsuit, the plaintiffs said that Egorov engaged in a brazen, multi-pronged scheme to defraud them. He said that after Egorov offered to sell Swiss Stake shares for about $1 million, he sent a total of 925,233.54 USDC to Egorov. However, Egorov reportedly did not transfer the shares.
Interestingly, Egorov’s lawyers say they are on the right side of the law. Lawyer DLA Piper said several Swiss courts have sided with him. According to him, the plaintiffs’ decision to pursue a US lawsuit was “probably to take advantage of the hostile crypto climate there”. Following Judge Ulmer Jr.’s rejection, DLA Piper said in a statement:
“We are extremely pleased for Michael that the court understood that the parties agreed to resolve all disputes exclusively in Switzerland and correctly rejected the attempt to drag him into the California lawsuit. “We are confident that Michael will prevail in the Swiss courts, which have already cast doubt on the plaintiffs’ claims.”
In response, the plaintiffs’ attorneys, Latham & Watkins, stated that the dismissal was merely procedural and not based on the merits. he adds:
“We are confident that we will hold him accountable and that our customers will be appropriately given what they were promised – a stake in the Curve platform.”
In addition to the lawsuit, there are some concerns about Egorov’s debt position totaling $100 million. These positions are reportedly backed by approximately 47% of Curve’s CRV circulating supply. Unfortunately, the CRV token has underperformed, falling by more than 40% over the past 3 months and by nearly 25% in the past month. This has raised fears that loans at risk of liquidation could cause problems for the DeFi sector. according to an x Thread, Egorov has a $63.2 million USDT loan on Aave, backed by $305 million CRV. Frax Finance also has a $15.8 million FRAX loan, backed by $59 million CRV.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to strip down the secrets of crypto stories to the basics so that anyone anywhere can understand without too much background knowledge. When Tolu is not deeply immersed in crypto stories, he enjoys music, loves to sing and is an avid film buff.
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