Source: Cointelegraph
Original: “NFT Founder Accused of Stealing Millions from Bitcoin (BTC) Project”
Multiple investors in the non-fungible token (NFT) project Hashling NFT have accused its founder of embezzling millions of dollars in profits from the project and its closely related Bitcoin mining business.
According to court documents filed in Illinois on May 14, the plaintiffs allege that their former business partner, Jonathan Mills, deceived them by claiming he transferred at least $3 million from the assets of Hashling NFT and the Bitcoin mining project to a holding company—Satoshi Labs LLC (formerly known as Proof of Work Labs LLC), of which Mills is the founder and CEO.
The plaintiffs are suing Mills for fraud and breach of fiduciary duty, claiming they have not received any equity returns as promised by Mills.
They also stated that they raised a total of $1.46 million from two NFT issuances on the Solana and Bitcoin blockchains but failed to receive any returns on their investments.
According to the plaintiffs, Mills subsequently began to avoid them and added that he created a flawed shareholder agreement to falsely support his claim that the holding company controlled the project’s assets.
The plaintiffs stated that this agreement was "full of errors" and was intended to support his lies.
According to the allegedly severely flawed shareholder agreement, Mills would receive 67% equity in Proof of Work Labs (later renamed Satoshi Labs), while several other investors contributed up to $20,000 to the company but only received 2% equity in return.
He allegedly assured investors that despite the company’s name change, their equity percentages would remain unchanged.
Mills also held 67% of the voting rights on all matters related to Proof of Work Labs (at the time's name), while no other partner's voting rights exceeded 2%.
Cointelegraph has contacted Mills but did not receive an immediate response.
The Hashling NFT project originated from a different concept initially discussed by Mills and one of the plaintiffs, Dustin Steerman, who had previously established a business relationship with Mills through early collaborations.
Although Mills initially told Steerman that he had no funds and lacked NFT-related experience to contribute to the project, they still decided to move forward with the Hashling NFT project.
“Mills showed a willingness to push the project forward, and he did present a concept at the beginning,” said the investors' attorney, Clinton Ind of Ind Legal Group LLC, in an interview with Law360. “Although that was not the final concept adopted, it did inspire the project, and… everyone enjoyed the collaborative process in the early stages.”
To ensure the success of the Hashling NFT project, Mills and Steerman recruited other investors (now also plaintiffs) to assist with various tasks, from NFT art creation and social media marketing to attending NFT industry conferences in New York.
The plaintiffs claimed that Mills even persuaded his girlfriend to invest in the Hashling NFTs project.
In addition to the lawsuit for fraud and breach of fiduciary duty, the plaintiffs are also requesting the court to establish a constructive trust over the project’s assets and seek full legal compensation.
Related: Sonic Labs Wins Lawsuit, Seeks Liquidation of Multichain Foundation
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