IOTA Co-Founders Could Engage In Legal Battle Over Allegations of $7.7M embezzlement


On February 3, 2020, IOTA co-founder Sergey Invancheglo threatened legal action against fellow co-founder David Sønstebø, in a tweet accusing him of embezzlement. The rift reportedly involves an alleged 25,000,000 MIOTA, worth about $7.7 million at current prices.

Sergey, popularly known as “Come from Beyond,” revealed that the accusation is connected with the funding for JINN Labs, a computing hardware company he co-created with David Sønstebø back in 2014. The company was first launched before the establishment of the IOTA project.

Sergey raged on Twitter, notifying the community that he won’t work with David Sønstebø any longer, adding that he’s contacting his lawyer to retrieve his “25 Ti” from David.

In a rebuttal, David tweeted that it is disheartening for Sergey, who has been his partner for six years, to develop cold feet and go back on an earlier collective agreement at the last minute.

Sergey Disregards IOTA Progress

David argues that despite Sergey leaving the IOTA foundation almost a year ago, he has refused all progress made by the foundation.

Presently, the foundation is working on implementing a solution that would see the IOTA function without a central coordinator, the Coordicide. That’s on top of Chrysalis, a vital development stage that precedes the elimination of the coordinator.

David says that Sergey was tasked with leading alternative solutions to these two but failed to offer better-performing solutions and instead chose to quit.

Sergey joined the IOTA Foundation board of directors in August 2018, after creating Nxt. Less than a year later, he resigned from the Foundation and stepped down from its board of directors.

According to a leaked conversation concerning the fallout between the founding members of IOTA, Sergey provided a “vote of no confidence” in co-founder Dominik Schiener’s abilities, suggesting that he resigned in 2018.

Purportedly, after leaving the IOTA Foundation, Sergey sold his mIOTA to start Paracosm, a company that builds virtual games. A year later, it seems a rift has erupted over the work Sergey was still doing for IOTA.

David Sønstebø To Reveals Details of the JINN Project

JINN has been seen as a secret and mysterious innovation project of IOTA. The hardware project, if successful, will signal a breakthrough for the IOTA ecosystem.

Coincidentally, the dispute between the co-founders took place just a day before Sønstebø planned to answer queries on the mysterious JINN project.

In the comment thread to Sergey’s twitter accusation, the IOTA community seems to take the side of David, with some insisting that the dispute should not be made public but solved between the two participants privately.

Relevant news