Canadian startup accuses ConsenSys of stealing code for recurring payments system

Canadian tech startup BlockCrushr Labs is taking ConsenSys to court over stolen trade secrets.

In the filed lawsuit, BlockCrushr claims that the Ethereum-focused company stole their idea for a recurring payments solution powered by smart contracts on the Ethereum blockchain. According to the complaint, ConsenSys launched its platform, “Daisy Payments,” a day before BlockCrushr launched its own product. 

In 2018, BlockCrushr participated in the ConsenSys Tachyon Accelerator Program, during which its team met with ConsenSys and “detailed every aspect of its marketing, financial, technical, and regulatory strategy.” According to the complaint, BlockCrushr also shared the source code for its recurring payments platform. 

BlockCrushr claims ConsenSys said it would help the startup with funding and investments, which BlockCrushr says it never received. In February 2019, the ConsenSys team “abruptly ceased their communications” with BlockCrushr. Without the promised funding and investments, the startup had to “layoff employees and streamline its operations.” 

After securing funding with a new investor, BlockCrushr pushed to get its recurring payments product to market as soon as possible. On August 22, 2019, a day before their product launch, ConsenSys launched Daisy Payments. In the lawsuit, BlockCrushr accused ConsenSys of acting as an advocate and then copying the startup’s technology, “using their position of trust” to launch “an identical, competing product.” 

BlockCrushr is seeking compensatory and royalty damages, profits made by ConsenSys for allegedly stealing trade secrets, injunction and legal expenses. 

After the publication of this story, ConsenSys sent the following statement to The Block:

"We are aware of certain claims filed by Blockcrushr d/b/a Groundhog. It is general ConsenSys policy to not comment on on-going legal matters but we must deviate from that policy in this case to express our severe disappointment that such baseless claims are even being filed. The facts tell a markedly different story than the falsities put forth by Groundhog and their counsel. We look forward to vigorously defending the reputation of our organization and products."

 This story has been updated with comment from ConsenSys.