A report has emerged alleging a “pact” between Avalanche’s Ava Labs and law firm Roche Freedman LLC to take advantage of the US legal system to handicap Avalanche’s competitors.
It claims that, by using class-action lawsuits, Roche Freedman has been able to gain access to valuable inside information from Ava Labs’ competitors, as well as draining target organisations’ time, money and resources.
Crypto Leaks, which published the claims, styles itself as a collection of “diehard blockchain enthusiasts,” which aims to “[nudge] our industry towards a brighter, more honest future.”
However, the sensationalist tone and narrow focus of the site’s three articles to date led to concerns over the legitimacy of the allegations. The pieces have a strong focus on perceived conspiracies against the Internet Computer Protocol and “major contributor” DFINITY, against which Roche Freedman filed a class action suit earlier this month.
Roche Freedman has also filed class-action claims against Solana and Binance, and the piece contains several hidden-camera videos of Kyle Roche, founding partner of Roche Freedman. Although the individual clips are short and contextualized by the surrounding text, Roche is seen to describe his close relationships with Ava Labs as its “crypto expert” and brags about having “seen the insides of every single crypto company” as well as admitting his influence over cases in which the judge and jury’s understanding around blockchain may be lacking.
Furthermore, the links between the organizations are clear and long-standing (at least in crypto terms). Almost three years ago, Ava Labs founder and CEO Emin Gün Sirer showed his support for Roche Freedman’s filing of a class action suit against Tether and Bitfinex.
The following year, Avalanche announced the launch, in collaboration with Roche Freedman, of the Initial Litigation Offering (ILO) model — a way to tokenize litigation financing with holders receiving a share of any future financial settlement.
Sirer and COO Kevin Sekniqi immediately dismissed the report as a “conspiracy theory.” Later, Sirer published a longer post downplaying Roche’s involvement, stating that “he has only represented Ava Labs in a defensive capacity” and that Roche Freedman “is one of more than a dozen law firms we employ.”
In response to the article, Roche has named Christen Ager-Hanssen as the creator of the videos. He claims that Ager-Hanssen works for Dominic Williams, the creator of ICP Token, and the defendant in a high-profile securities fraud litigation [Roche’s] firm brought against him. He also dismisses the article’s claims of a “pact” and says the recorded statements “were obtained through deceptive means, including a deliberate scheme to intoxicate, and then exploit me, using leading questions.”
Regarding the involvement of Ava Labs in any litigation targeting competitors, Roche states that his “firm’s plaintiff-side practice has remained a source of disagreement in our relationship with Ava Labs, and they have criticized our pursuit of many such cases,” (our emphasis).
Regardless of the credibility of those involved, the report has done damage. The price of Avalance’s native token, AVAX, dropped approximately 10% as the article gained traction on Monday.