Elad Arad, a former partner of one of the co-founders of the Israeli blockchain startup Orbs, filed a lawsuit against the co-founders of the firm, Uriel and Daniel Peled, for dissolution of his shares in a joint venture, called Caointree Capital.
According to a report by Globes, Arad is also suing Orbs and other companies of which the Peled brothers are partners – Cointree Management Microverse, Hexa Labs, and Hexa Solutions – for committing “conspiracy, deceit, and serious fraud, as well as unlawful enrichment.” The lawsuit was filed after an 18-month-long failed mediation process in a Tel Aviv court.
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Though the exact amount involved in the claim is not known yet, initial estimations are projecting the amount at tens of millions.
“The respondents (the Peled brothers) exploited Cointree Capital’s business opportunities to set up new companies based upon new opportunities in the new world of virtual currencies, as well as ideas and plans of Cointree Capital,” the lawsuit stated.
“[Arad] never was a founder of Orbs”
However, according to Orbs, Arad’s claims are baseless and he was never a part of Orbs and only worked with Uriel Peled to set up a crypto hedge fund in Israel, which was never launched due to the regulations in the country.
“Elad Arad, a real estate professional, is not and never was a founder of Orbs. We want to emphasize that Mr. Arad has never been involved in any way and has not had any role in the Orbs project,” Danny Brown, head of partnerships and strategy at Orbs, told Finance Magnates.
“Mr. Arad’s claim to be entitled to a portion of any and all digital asset businesses Uriel and Daniel are involved with since has unfortunately dragged Orbs into the dispute and is a completely baseless claim.”
Launched in 2017, Orbs had one of the largest initial coin offerings (ICOs) last year in May as it raised $118 million.
Arad also claimed that he was the contact point for transactions between Orbs and the ICOs of Kik and Sirin Labs.
“Mr. Arad only began making claims and threats after the success of the Hexa Group’s and Orbs’ businesses was reported in the media. This is nothing more than an attempt to extract funds from a successful project by a person who made no contribution whatsoever to this idea, inception or success,” Brown added.