Several investors in a non-fungible token (NFT) project, Hashling NFT, have accused its founder of misappropriating millions of dollars in profits from the project and a closely tied Bitcoin mining operation.
According to the May 14 court filing in Illinois, the plaintiffs allege that their former business partner, Jonathan Mills, lied about transferring assets from Hashling NFT and at least $3 million from the Bitcoin mining project to a holding company — Satoshi Labs LLC (formerly known as Proof of Work Labs LLC), which Mills is the founder and CEO of.
The plaintiffs have sued Mills for fraud and breach of fiduciary duty, claiming that they have not received any of the equity returns that he supposedly promised.
They also claim to have raised a combined $1.46 million from two NFT drops on the Solana and Bitcoin blockchains, but didn’t receive any returns from their investment.
Excerpt of the plaintiffs’ claims made against Joshua Mills in an Illinois district court. Source: PACER
Mills allegedly began ghosting them shortly afterward, according to the plaintiffs, adding that he created a flawed shareholder agreement to falsely support his claim that the holding company controlled the project’s assets.
This was “rife with errors” to support his lie, the plaintiffs said.
According to the supposedly flawed shareholder agreement, Mills was to receive a 67% equity share in Proof of Work Labs (before he later renamed it to Satoshi Labs) while several other investors contributed up to $20,000 into the company in exchange for just 2% equity.
He allegedly assured them that their equity stakes would remain unchanged despite the name change.
Mills also held a 67% voting stake on all matters related to Proof of Work Labs (at the time) while no other partner held more than 2%.
Cointelegraph reached out to Mills but didn’t receive an immediate response.
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