Israel’s Orbs Blockchain Project Dragged to Court for Fraud
Founders of the Orbs distributed ledger technology (DLT) project, Uriel and Daniel Peled have been sued by Elad Arad, a former partner of the duo in a failed joint venture called CoinTree Capital. Arad claims Uriel and Peled used the resources of CoinTree Capital to launch new crypto startups while also unlawfully dispossessing him of his shares in the company, reports Globes on August 5, 2019.
Orbs Accused of Unlawful Practices
Per sources close to the matter, Elad Arad, a former partner of Orbs, an Israeli blockchain startup has filed a lawsuit against Uriel and Daniel Peled, two brothers who are co-founders of the firm for unlawfully dispossessing him of his shares in a joint venture named CoinTree Capital.
Reportedly, both sides have been trying to come to a favorable out of court settlement for about 18 months without much success before Arad decided to file the lawsuit in a Tel Aviv District Court, last Thursday.
Alongside Orbs and its founders, Arad is also suing four other firms including CoinTree Management, Microverse, Hexa Labs and Hexa Solutions for “oppression of a minority shareholder, breach of contract, theft of commercial secrets, negligence and unlawful enrichment.”
According to Arad’s lawsuit, the Peled brothers stole the business ideas, content, plans and other tangible assets of CoinTree Capital and used them to establish new crypto-based startups, leaving him behind and depriving him of his shares in the new companies.
If the case ends in favor of Arad, it is estimated that the Peled brothers and the associated firms will have to pay him tens of millions of dollars.
Established in 2017 by Daniel Peled Netta Korin, Tai Kol, and Uriel Peled, Orbs is an enterprise blockchain platform powered by Ethereum.
The firm has reportedly raised a total of $133 million so far, via two major funding rounds which includes an initial coin offering (ICO) that generated $118 million in May last year and another $15 million from Kakao Investment.
However, in response to Arad’s claims, Orbs has made it clear that:
“The claimant does not have and never had any cause of action against the company and other respondents. As such, Orbs will not submit to Arad’s threats. The company has all the arguments and evidence necessary to refute his claims and these will be presented to the court in due course.”