Ava Labs Dismisses “Conspiracy” Alleging Avalanche Paid Lawyers to Sue Competitors

Ava Labs founder and CEO Emin Gün Sirer took to Twitter to deny the “inflammatory” claims presented in the article. 

Crypto Leaks Alleges Secret Link Between Ava Labs and Roche Freedman 

Avalanche has found itself at the center of crypto’s latest big drama. 

An August 26 report from crypto whistleblower Crypto Leaks alleges that the Layer 1 blockchain’s development company, Ava Labs, allocated around 1% of the AVAX token supply and Ava Labs stock to law firm Roche Freedman as payment for the firm to stage litigations and class-action lawsuits against some of its competitors. 

Roche Freedman is a legal firm known for its various dealings in the crypto space; it recently sued Binance.US over Terra’s collapse and filed a suit against Solana Labs claiming SOL was an illegal security. 

Among the allegations posted in the Crypto Leaks report, several videos appear to show founding partner Kyle Roche claiming that Roche Freedman was paid to support Ava Labs and attack its competitors, including Dfinity and Solana. In the videos, the subject reported to be Roche appears to claim that he reached an agreement with Ava Labs in September 2019 and was the first recipient of Ava Labs stock after Andreessen Horowitz. “We did a deal where I agreed to provide legal services in exchange for a certain percentage of the token supply… that was September 2019,” he says. 

The subject goes on to claim that he was “around a point” in tokens and equity, likely referring to a percentage point. According to the subject, his allocation represented around one-third of Ava Labs co-founder and chief operating officer Kevin Sekniqi’s allocation. 

He then describes litigation as “an underused tool,” to which the undercover agent in the video responds “you use [litigation] as a strategic instrument to support Ava Labs.” “Correct,” he responds. In the clips, the subject also claims that he currently lives with Sekniqi. 

The subject later says that he has insider knowledge of how the crypto space operates. “Because I sue half of the companies in this space, I know where the market is going,” he says. He later claims that Roche Freedman’s lawsuits have acted as a distraction for U.S. regulators, drawing attention away from Ava Labs. “They haven’t been sued yet, and there’s a reason for that,” he says. “I deal with making sure the SEC and CFTC have other magnets to go after.” He also adds that he has helped ensure there’s “no such thing as regulation” for Ava Labs. 

Gün Sirer Speaks Out 

The Crypto Leaks piece did the rounds on Crypto Twitter over the weekend. Several prominent crypto personalities picked it up late Sunday, leading Ava Labs founder and CEO Emin Gün Sirer to speak out on Twitter. “How could anyone believe something so ridiculous as the conspiracy theory nonsense on Cryptoleaks? We would never engage in the unlawful, unethical and just plain wrong behavior claimed in these self-serving videos and inflammatory article,” he wrote. “Our tech & team speak for themselves.” 

How could anyone believe something so ridiculous as the conspiracy theory nonsense on Cryptoleaks? We would never engage in the unlawful, unethical and just plain wrong behavior claimed in these self-serving videos and inflammatory article. Our tech & team speak for themselves.

— Emin Gün Sirer? (@el33th4xor) August 28, 2022

Sekniqi, meanwhile, said that the report was “stupidity to the maximum mega giga level written by some ICP conspiracy site.” 

Binance CEO Changpeng Zhao also weighed in, describing the allegations as “wild.” 

Roche Freedman’s LinkedIn account makes no mention of Ava Labs, and there’s no public record from either party that confirms their relationship. 

Interestingly, however, Gün Sirer has previously described Roche Freedman as “top notch” and Avalanche’s official Twitter account is one of its 627 followers. Avalanche, Gün Sirer and Sekniqi all follow Roche’s account. 

Avalanche was one of several Layer 1 networks to enjoy a meteoric rise as crypto rallied in 2021, propelled by soaring gas fees on Ethereum and a nine-figure raise led by Polychain Capital and the now-bankrupt hedge fund Three Arrows Capital. It peaked at just under $145 in November 2021 but has since suffered in the crypto slump. It took an 8.6% hit on today’s rumors, currently trading at about $18.42. 

Crypto Briefing reached out to Ava Labs and Roche for an official statement but had not received a response at press time. 

This story is developing and will be updated as further details emerge. 

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.