Rebase co-founder faces allegations of acting independently in lawsuit filed by associate.

The co-founder of the non-fungible token (NFT) initiative Rebase is currently facing legal action from his alleged business partner, who accuses him of acting independently by misappropriating $2 million from a shared crypto wallet and removing another co-founder from the company.

An April 17 submission to a United States District Court in California by Krzysztof Gagacki, who claims to be a co-founder of Rebase, outlines eight distinct allegations against the firm’s other co-founder, Edmond Truong.

Gagacki is seeking a jury trial for breach of contract, breach of fiduciary duty, defamation, and trademark infringement.

While the exact timeline of the decline in their professional relationship remains unclear, Gagacki asserts that Truong violated a partnership agreement on October 27, 2022, by diverting $2 million into a separate wallet that is owned and controlled by Truong without Gagacki’s approval.

Gagacki claims he possesses a 50% stake in the funds and states that Truong is withholding the private keys to the digital wallet from him.

Krzysztof Gagacki, co-creator of https://t.co/oBDvtTLDqk and the “Cy-B3lla” Bella Hadid NFT project, has filed a lawsuit against his co-founder today for allegedly misappropriating $2,000,000 and “acting independently.” pic.twitter.com/I3DTFR6ZhM

— Rob Freund (@RobertFreundLaw) April 18, 2023

In the legal filing, Gagacki claims that Truong “ousted” him from the business by presenting himself to external parties as the “sole owner” and “decision maker” for Rebase.

Gagacki further alleges that Truong is asserting that Gagacki is no longer “employed” at the company after circumstances had “escalated.” A LinkedIn profile belonging to Gagacki does not indicate any employment history with Rebase.

Truong is also accused of “intentionally interfering” with several potential agreements that Gagacki had been negotiating for the company, in addition to making various defamatory remarks to the firm’s business associates regarding Gagacki.

Gagacki contends that these remarks have had a “devastating impact” on his reputation.

One of the agreements involved American celebrity Bella Hadid, who was featured in the firm’s Cy-B3lla NFT project but subsequently declined further collaboration after it became evident that the two business partners were in conflict, according to the filing.

Truong is also alleged to have taken control of a Twitter account associated with Hadid’s NFT collection, which Gagacki claims to hold trademark rights for through his other company, IOVO AG:

“[Truong] has also commandeered the @REBASEgg and @cybellaxyz Twitter accounts. Specifically, [Truong] has altered the passwords for these accounts and is actively denying Mr. Gagacki access.”

Another allegation made by Gagacki was Truong’s unauthorized attempt to launch a Rebase token on the Ethereum layer 2 scaling solution Arbitrum.

Related: ‘Wave of litigation’ to hit NFT space as copyright issues abound

If a token is launched, it could have significant consequences for Rebase, as outlined in the filing:

“If a Rebase app token is listed on any major cryptocurrency exchange, the market value of the tokens, which will be minted on the Arbitrum network and offered to the public, could exceed the Rebase app’s last round valuation of $150,000,000.”

According to the firm’s Twitter account, Rebase is scheduled to integrate with Arbitrum on April 21:

Save the Date ⏲️
April 21st, 2023. Rebase is coming to Arbitrum! #RebaseonARB
The First AR Adventure and M2E App on $ARB pic.twitter.com/9QsMBsAlfe

— Rebase (@REBASEgg) April 11, 2023

The firm’s $150 million valuation has been supported by venture capital investments from Animoca Capital, Anti Fund Investment Fund, LLC, DeFiance Capital, and the now-defunct Three Arrows Capital.

Cointelegraph reached out to Gagacki, Truong, and Rebase but did not receive an immediate reply.

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