A judge has denied Aptos Labs CEO Mo Shaikh's motion to dismiss a lawsuit filed by Shari Glazer, member of the Glazer family, who alleges that as an early potential investor she was cheated out of a fair share of equity.
Aptos Labs was founded by former Meta employees with the goal of building a scalable Layer 1 blockchain, able to reach an audience of billions of people. The technology is based on the Diem payments network, which Aptos’ founders worked on while at Meta, formerly known as Facebook.
Glazer and her firm Swoon Capital have been fighting for up to $1 billion from Matonee, also known as Aptos Labs, according to a complaint filed with the Supreme Court of the State of New York in March.
Glazer and Swoon claimed that a “fraudulent scheme” implemented by Shaikh deprived her of her rightful share of a partnership in a “blockchain technology venture.”
The latest development in the case has seen a motion to dismiss the lawsuit denied, according to a court transcript published on Monday, as the judge cast uncertainty on how the dispute would culminate.
"I can't emphasize enough that both parties here should have significant uncertainty in terms of how this case unwinds," said Justice Jennifer Schecter. "It would behoove the parties to enter into some type of negotiation where they can work something out, limit the uncertainty and acknowledge the roles that everybody have played in connection with this transaction," she added.
The court dismissed four legal claims, including fraud, but allowed three others to proceed and be hashed out between the pair—for breach of agreement, unjust enrichment, and Glazer’s entitlement to a 50% stake in Matonee.
“We are pleased with the court’s ruling in which the majority of Ms. Glazer’s claims were dismissed outright — despite a high legal standard at this phase of litigation that requires giving Ms. Glazer nearly every benefit of the doubt and requires accepting Ms. Glazer’s allegations at face value," an Aptos spokesperson told The Block in an emailed statement.
"As the facts will show, the claims in Ms. Glazer’s lawsuit are meritless, and we will continue to fight them. We will not allow this lawsuit to distract us from achieving our mission and we will continue to build for the benefit of all.”
The dispute comes as Aptos gears up to launch its blockchain mainnet.
The tech provider has garnered a host of heavyweight backers since its inception. Aptos had announced in March that was funded to the tune of $200 million in a round led by venture firm Andreessen Horowitz with other investors ranging from Multicoin Capital to Coinbase Ventures. Katie Haun, Three Arrows Capital, ParaFi Capital, Irongrey, Hashed, Variant, Tiger Global, BlockTower, FTX Ventures and Paxos also joined the round.
At the time, while not disclosing numbers, Aptos founders told TechCrunch they were "well off into the unicorn territory," indicating that the company was valued at a minimum of $1 billion.
In September, Binance's VC arm said it would top up an investment in the Layer 1 developer, adding to an $150 million round announced in July, led by FTX Ventures and Jump Crypto.
At the time, Bloomberg reported that Binance's co-founder Yi He said the market value of Aptos is now estimated to be more than $4 billion. A spokesperson for Binance contacted The Block to say the $4 billion valuation is inaccurate, while declining to specify the true figure.
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