TechFlow reports that three venture capital firms—ParaFi Capital, Framework Ventures, and 1kx—are suing Curve founder Michael Egorov for commercial fraud. These three firms invested $1 million in the Curve platform in 2020, but Egorov deposited the funds into Curve’s liquidity pool without issuing the VC firms CRV tokens or returning the investment.
According to the lawsuit, plaintiff Michael Egorov developed the concept of Curve and built a small prototype while working at NuCypher. To scale up Curve, Egorov sought VC funding and pitched his idea to these three firms. The plaintiffs were also users of both the Curve and Swiss Stake platforms, and Egorov needed legitimacy from a California-based DeFi venture fund to launch his project. However, Egorov never relinquished control over Curve, maintaining overwhelming authority, and used fraudulent means to secure personal benefits—including CRV tokens and fees earned from providing liquidity, as well as proceeds from selling millions of dollars worth of CRV tokens. The three VCs did not receive the promised equity in Swiss Stake, nearly $1 million in invested funds was never repaid, and they never received the anticipated tens of millions of dollars worth of CRV tokens.
Michael Egorov's defense team claims that the allegations brought by these three VCs in a San Francisco court are an extension of ongoing litigation originally filed in Switzerland in 2020.
