Avalanche (AVAX) tanks amid CryptoLeaks allegations — CEO Emin Sirer hits back

Key Takeaways:

  • Cryptocurrency industry Whistle blower CryptoLeaks has made serious allegations against Avalanche (AVAX)
  • According to the report, the company commissioned a legal team to file litigation against competitors
  • AVAX, the native token of Avalanche, tanked over 23% amid SEC crackdown fears
CryptoLeaks has accused Avalanche (AVAX) of immoral business practices.
CryptoLeaks has accused Avalanche (AVAX) of immoral business practices. Credit: Neil Moralee via Flickr

YEREVAN (CoinChapter.com) — Self-styled whistleblower website CryptoLeaks published a list of allegations against cryptocurrency firm Avalanche (AVAX). As a result, the platform’s token price tanked 23% over the weekend before founder and CEO Emin Gün Sirer rubbished the claims today. 

CryptoLeaks report makes tall claims against Avalanche (AVAX)

On Friday, the website accused Ava Labs, the company behind the Avalanche blockchain, of illicit business practices. According to the extensive post, Ava Labs paid lawyers to harm other crypto projects, giving themselves a competitive edge. 

In a series of videos published with the article, U.S. Attorney Kyle Roche of Roche Freedman LLP seems to reveal his association with Ava Labs CEO Emin Gün Sirer and the company’s COO Kevin Sekniqi. 

In return for large amounts of AVAX tokens and Ava Labs corporate stock, Roche allegedly misused the American legal system to target Avalanche competitors. 

Kyle confirms that they litigate against (sue) other parties in crypto as a “strategic instrument” to “support Ava Labs” to a level where they made him an “equity partner,” 

 the CryptoLeaks post alleges. 

Moreover, the post accuses the legal team of deliberately directing regulators such as the Security Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to competing blockchains. 

Calling himself one of the top ten crypto experts in the world, Roche admits that he has sued “half the companies in this space” to help Ava Labs and Avalanche (AVAX) succeed.

In a tweet which he later deleted, Binance CEO Changpeng Zhao claimed his company was also a target of the modus operandi.

Binance CEO claimed Avalanche targeted his company.
Binance CEO claimed Avalanche targeted his company. Credit: Twitter

Other industry players are equally shocked at the alleged revelations from CryptoLeaks. Ari David Paul, the founder of Block Tower Capital, believes the article holds merit. 

“I assume this is accurate and that it’s as bad as it looks. Fits with everything I’ve seen previously from both Sirer and Roche,” 

he tweeted

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Avalanche (AVAX) CEO rubbishes CryptoLeaks allegations 

Ava Labs CEO Emin Gün Sirer dismissed the allegations from CryptoLeaks. Calling the article “ridiculous conspiracy theory nonsense,” Sirer said his company does not engage in or support any underhanded tactics suggested in the article or the video clips. 

“Neither I, nor anyone else at Ava Labs ever directed Roche in his selection of cases. We do not receive materials or information from him, and we do not entrust our legal affairs to him… Roche has filed all their lawsuits independently of us,”

 Sirer said in a detailed post on Medium. 
Avalanche (AVAX) CEO Emin Sier denounced the allegations
Avalanche (AVAX) CEO Emin Sier denounced the allegations. Credit: Twitter

However, the Avalanche CEO confirmed that Roche has defended the company in a few “cases of minor importance.”

Delphi Digital’s José Maria Macedo also slammed the article as a biased piece. 

“Not an AVAX holder but the CryptoLeaks article seems like a pure hatchet job… While these look terrible, the claims in the article go far beyond what’s said in the video Clearly biased and bad faith coverage,” 

he said

Meanwhile, CryptoLeaks alleged that Ripple (XRP) CEO Brad Garlinghouse also invested in Roche’s firm before Avalanche. Accordingly, Garlinghouse encouraged Roche to sue XRP competitors. 

However, Garlinghouse claimed he has never met or spoken to Kyle Roche, much less invested in his firm. 

 Ripple (XRP) CEO Brad Garlinghouse denied CryptoLeaks allegations.
Ripple (XRP) CEO Brad Garlinghouse denied CryptoLeaks allegations.

AVAX price tanks. SEC to crack the whip? 

As the allegations surfaced, AVAX, the native token of Avalanche, tanked. Between Friday, when the post appeared, and Monday, the token fell over 23%, according to data available on CoinMarketCap. 

AVAX opened on August 29th and was priced at $23.01 per token but fell to as low as $17.56 before making slight improvements. At the time of writing, AVAX trades under $19. 

Avalanche (AVAX) price tanked amid CryptoLeaks claims
Avalanche (AVAX) price tanked amid CryptoLeaks claims. Credit: CoinMarketCap

Meanwhile, some traders are wondering if the allegations will give enough reason for regulators, such as the Securities and Exchange Commission (SEC) to go after Avalanche.  

“Potentially one of the most serious allegations in crypto history. If proven true, AVAX will be, to use Roche Freedman’s language, the biggest magnet for the SEC/CFTC and be regulated to $0.00,” 

he wrote

Should the SEC crack the whip, as it did against Ripple (XRP), the result could prove to be disastrous. However, it remains to be seen if the allegations in the CryptoLeaks article have merit or if it is a regular hit piece, as alleged by many. 

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