Introduction

Crypto Leaks published a report on Friday containing a series of short videos from an unknown source. The report claimed that Ava Labs formed a secret pact with the law firm to use the American legal system ‘gangster style’ to ‘attack and harm crypto organizations.’ The same report also alleged that Ripple CEO Brad Garlinghouse funded a law firm to target competitor firms. The report claimed Roche, who founded Roche Freedman, was working with Boies Schiller Flexner, a firm that was representing Ripple in its lawsuit against the United States Securities and Exchange Commission (SEC).

[Jha, P. Ripple CEO comments on Crypto Leaks, denies funding law firm to target others. (Accessed August 29,2022)].

Ava Labs and CEO Emin Gün Sirer

“Ava Labs CEO Emin Gün Sirer has dismissed sensational allegations from CryptoLeaks that his company used litigation to ‘harm’ competitors and fool regulators, labeling it as 'conspiracy theory nonsense” [24x7 Crypto. The CEO of Ava Labs calls CryptoLeaks’ allegations “conspiracy theory garbage.”. (Accessed August 29, 2022)]. “Sirer made the comments in an Aug. 28 Twitter post to his 280,500 followers, referring to an Aug. 26 article from CryptoLeaks alleging the company formed a ‘secret pact’ with U.S. law firm Roche Freedman to use the American legal system ‘gangster style’ to 'attack and harm crypto organizations” [Lindrea, B. Ava Labs CEO denies CryptoLeaks’ claims as ‘conspiracy theory nonsense’. (Accessed August 29, 2022)].

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Under the alleged deal, Ava granted a 1% of the supply of AVAX tokens and a similar amount of equity to Roche in exchange for bringing lawsuits against parties in crypto […] CryptoLeaks alleged that the pact was meant to use the American legal system “gangster style” to harm Ava Labs’ or Avalanche’s competitors, steer regulatory attention away from the company’s commercial nature by suing other crypto actors and secretly pursue Emin Gün Sirer’s personal vendettas against individuals […] During the discovery process in litigation, attorneys are able to compel the production of documents and information. The simple fact of a lawsuit itself may cause negative publicity about the defendant.

[Nagarajan, S. Ava Labs CEO Rejects Report Alleging Conspiracy with Law Firm. (Accessed August 29, 2022)].

“The publication also said the videos of Roche suggest there was a tight-knit relationship between Roche and Sirer, which began in academia, and that they also moved into a co-working space together in Aug. 2019, around the time that the deal was made for him to provide legal services in exchange for token supply” [Lindrea, supra].

“Roche posted a statement on Monday to address the allegations stemming from what he termed, ‘illegally obtained, highly edited video clips that are not presented with accurate context.’ ‘Ava Labs has had no input, control, or insight into any of our firm’s plaintiff-side class action cases,’ he said” [Nagarajan, supra].

“According to Roche Freedman LLP’s website, Roche employs at least 24 attorneys, with offices situated in New York City, Boston and Miami. Roche attended North Western University School of Law and co-authored “Why Bitcoin is booming” in the Wall Street Journal in Jul. 2017” [Lindrea, supra]. “Ava Labs was founded in 2018 and counts 27 investors including Galaxy Digital, Balaji Srinivasan and Polychain, Crunchbase data shows. The firm’s Avalanche blockchain closed a $230 million token sale led by embattled crypto hedge fund Three Arrows Capital in September last year” [Nagarajan, supra].

Ripple and CEO Brad Garlinghouse

“The CEO of Ripple, Brad Garlinghouse, allegedly paid a law firm to pursue rival companies, according to the same source [CryptoLeaks]. According to the story, Roche, who established Roche Freedman, had previously worked for Boies Schiller Flexner, a company that was supporting Ripple in its legal battle with the US Securities and Exchange Commission (SEC). Roche allegedly approached Garlinghouse to invest in a law firm that would target competitor crypto firms with lawsuits quite similar to what Ripple was facing at the time. And Kyle claimed that Garlinhouse agreed to his proposal” (clarification added) [Ugo, C. Crypto Leaks: Ripple boss denies funding law firm to target others. (Accessed August 29, 2022)].

Needless to say, Garlinghouse has vehemently denied the allegations and has stated he “never met or spoken to (much less invested in) Kyle Roche” [Jha, supra].

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"Binance’s Changpeng Zhao, in a now-deleted tweet, described the allegations as ‘wild,’ giving room for the possibility of the videos being deep fakes. Notably, Crypto Leaks alleges that Roche Freedman recently sued Binance.US for the Terra ecosystem collapse at the behest of Ava Labs [Brennen, M. Ripple CEO Brad Garlinghouse Denies Claims That He Funded A Law Firm To Target Competitors. (Accessed August 29, 2022)].

“Ripple and XRP group had been fast to return to the protection of the corporate’s CEO, the place one consumer pointed towards the flaw within the argument put ahead by Crypto Leaks. The consumer identified that the claims had been based mostly on Kyle’s feedback, which had been later offered as details with out proof” [Patterson, P. Ripple CEO comments on Crypto Leaks, denies funding law firm to target others. (Accessed August 29, 2022)].

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“While Garlinghouse denied investing in a law firm that targets competitors, Ripple’s co-founder and executive chairman Chris Larsen was infamously involved in the campaign to change the code of Bitcoin” [Jha, supra]. “Notably, Garlinghouse’s Ripple remains locked in a legal battle with the US Securities and Exchange Commission, which claims XRP is unregistered security” [Brennen, supra].