Did Avalanche (AVAX) backer Ava Labs pay lawyers to sue competitors? CEO dismisses rumors

YEREVAN (CoinChapter.com) — Ava Labs project Avalanche (AVAX) found itself amid a “conspiracy” involving paid lawyers and competitor blockchains.

On Aug 26, a “whistleblower” website, CryptoLeaks, published a piece accusing Ava Labs CEO Emin Gün Sirer of “harming” the crypto space and suing “half the companies” in the space through Roche Freedman law firm.

Before making conclusions, unfolding the story and examining the details is crucial.

Avalanche and Ava Labs CEO Roche Freedman

In detail, Ava Labs, the company behind Avalanche blockchain, apparently partnered with Roche Freedman law firm since entering the crypto scene in 2019-2020. Moreover, CryptoLeaks published a series of videos in which law firm co-founder Kyle Roche admits to having substantial profits from the partnership.

More precisely, he claims to be “biased” towards the company and holding AVAX equal to a third of Ava Labs COO Kevin Sekniqi’s holdings.

In the subsequent video bites, Roche confirms that his firm litigated against other parties in crypto as a “strategic instrument” to “support Ava Labs” to a level where they made him an “equity partner.” He then admits to litigation being an “underused tool” and suing “half the companies in this space.”

Roche Freedman is allegedly running at least 25 class actions. The targets include crypto exchange Binance, Avalanche competitors Solana (SOL), and the Dfinity Foundation, the company behind Internet Computer (ICP).

Also read: The next big bullish Bitcoin (BTC) narrative: US Student debt relief. 

Why would Ava Labs want to sue competitors?

Besides the obvious reasons behind the alleged litigations, Roche claims that legal actions also have a hidden motive.

According to U.S. laws, the party that initiated the litigation has the right to claim access to privileged accounts, commercial data, email, social media communications, and more, using a special legal process known as “discovery.”

Because I sue half the companies in this space, I know where this market is going, I believe, better than… I believe I’m one of the top 10 people in the world. I’ve seen the insides of every single crypto company.

admitted the lawyer.

Roche protects Ava Labs

In detail, Roche Freedman allegedly used class action suits against competitors. Meanwhile, the American class action system forces targets to spend far more on defense than the law firm would spend litigating against them.

The judge can award “astronomical” damages against them if they lose. This drains the resources of competitors’ resources and “distracts them from their core work,” explained CryptoLeaks. Moreover, when asked how the lawyer impressed the Avalanche team, Roche answered:

They haven’t been sued yet, and there’s a reason for that. […] I deal with making sure that the SEC and the CFTC have other magnets to go after. […] Litigation can be a tool to competition.

said Roche in the videos.

How did Ava Labs respond to accusations?

The crypto sphere met the CrytpoLeaks article with mixed responses. Firstly, the snippets of the conversation don’t reveal the second party who spoke to Roche. Additionally, the video clips could have been taken out of context.

Binance CEO Changpeng Zhao commented on the article, calling the news “disturbing,” but deleting the tweet hours later.

Ava Labs CEO Sirer took a few days to respond and tweeted on Aug 29, calling the article “inflammatory” and the accusations “ridiculous.”

The comment section exploded with opposite opinions. Some followers claimed Sirer had no leg to stand on after the CryptoLeaks article. The other camp claimed that the latter was “written by an idiot” who did not understand the American legal system.

Several crypto analysts also voiced their opinion, calling for more clarity on Avalanche’s legal arrangements.

“Much more clarity is still needed from the team surrounding the nature of their legal representation,” agreed Miles Deutscher, another crypto analyst.