Consultant allegedly gets shorted after doing job too well

Quick Take

  • In Emerging Markets Intrinsic Cayman, LTD, et al. v. Kadena, LLC et al.
  • After investing in a “family and friends” round and Defendant allegedly hinting at strong institutional interest, Plaintiff inadvertently becomes the largest future holder of Kadena Coin
  • Emerging Markets Intrinsic (EMI) enters into a consulting agreement with Kadena, whereby Emerging Markets Intrinsic earns Kadena Coin for the completion of certain tasks
  • Allegedly, Kadena had not accounted for this in their financial modeling, and they needed to “play with the numbers,” to figure out how to pay EMI what they were allegedly owed

Want some bare-knuckled bitcoin litigation, agents (but not the James Bond kind), and news on why too much of a good thing sometimes isn't all that great? Read on, MacDuff! 

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

We’ve got another services agreement gone awry. This case involves a startup cryptocurrency company, some deep pockets, and the potential perils of biting off more than you can chew.

The plaintiffs in this case, Emerging Markets Intrinsic (EMI) and SRT Capital SPC (SRT), got involved with Kadena LLC in 2017, because their attorney introduced them to his son, Will Martino, who is CEO of Kadena, LLC. According to the complaint Kadena was having a “friends and family” fundraising round selling convertible notes, and they were welcomed to join the round. Both plaintiffs invested $50,000 each for $100,000 total. Later in 2017, Kadena allegedly informed the EMI and SRT of immense institutional investor interest in Kadena Coin, the cryptocurrency that Kadena LLC hoped to build. Based on this representation SRT bought the right to receive $1 million worth of Kadena Coin. At the end of the fundraising round it was revealed that Kadena only raised $2.25 million meaning that SRT had inadvertently become the largest future holder of Kadena Coin.

In order to grow their company, Kadena entered into a consulting agreement with EMI, because EMI had many contacts in the business world. As part of the services agreement, EMI would be rewarded with future Kadena Coin in three different ways: setting up a meeting with a qualified prospect, a qualified prospect agreeing