Former Zerocoin employee files lawsuit against company in a case more human than crypto

Quick Take

  • A former employee of Zerocoin alleges the company failed to issue him 15,000 units of his stock pursuant to a stock incentive plan in his contract
  • The plaintiff alleges the company told him two years later it never created the stock plan and so no grants were offered
  • After leaving the company over this issue and others, the plaintiff has lodged a suit with seven counts, including breach of contract and breach of fiduciary duty among others

Disclaimer: These summaries are provided for educational purposes only by Nelson Rosario and Stephen Palley. They are not legal advice. These are our opinions only, aren’t authorized by any past, present or future client or employer. Also we might change our minds. We contain multitudes.

As always, Rosario summaries are “NMR” and Palley summaries are “SDP".

[related id=1] Liu v. The Zerocoin Electric Coin Company LLC; and Does 1 Through 50, Inclusive, Superior Court of California, San Francisco County, CGC-19–57–6321 (May 29, 2019) [SDP]

This new state court lawsuit involves a dispute over an alleged equity grant promised by Zerocoin to the Plaintiff. It’s yet another example of how protocols may be decentralized and cryptographic and disputive as all get out but the rubber meets the road in business over what are fundamentally simple contract disputes.

According to the Complaint — which I hasten to add contains unproven allegations and aren’t necessarily true — Plaintiff and Zerocoin entered into a contract back in August 2016 where Plaintiff would be a Senior Software Engineer. In connection with that, he was granted an option to purchase 12,000 “Units” of Stock pursuant to a stock incentive plan. This was later amended to grant him 15,000 units. Plaintiff says that he was also promised a share of a “Founders Reward” in proportion to his option grant. (It is unclear who the 50 John/Jane Does defendants are).

Two years later, on December 31, 2018, plaintiff says the company sent a “status update” to him saying that they hadn’t actually created a stock option plan and that no grants had actually been offered. He send a books and records request several days later asking for access to corporate information to “determine the status and valuation of [promised] units[.]” The company said nope. Things quickly got ugly and Plaintiff says the company basically told him to stop bugging them or they’d fire him. He resigned on May 28, 2019 citing as reasons (1) failure to get the options; (2) “intolerable working conditions” and (3) be threatened with termination unfairly.

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