The founder of the public chain Aptos faces a $1 billion lawsuit? Sort out the case

Uncover the backstory of Aptos founder Mo Shaikh's $1 billion lawsuit against Glazer family member Shari Glazer.

The public chain Aptos is in full swing for the developer testnet, but the founder Mo Shaikh is facing a nearly $1 billion lawsuit from Shari Glazer, a member of the Glazer family, and her company Swoon Capital. The public chain Aptos was initiated by former team members of the Meta stablecoin project Diem , and has been favored by many top VCs, including A16Z , Multicoin Capital, Three Arrows Capital, FTX Ventures, Coinbase Ventures, etc. As a star public chain, what caused Aptos to be involved in lawsuits before it started? In this article, PANews details the ins and outs of the entire case based on a complaint filed by the plaintiff, Shari Glazer, to the New York State Supreme Court in March.

First of all, let's get to know one of the protagonists, Shari Glazer. Shari Glazer is an investor with extensive experience in the blockchain and cryptocurrency industry. The Glazer family behind it owns a global sports empire, including the NFL team Tampa Bay Buccaneers and Manchester United Football Club. In early 2021, Shari Glazer established a new venture (Venture) through his blockchain investment company Swoon Capital, aiming to launch Token and develop blockchain-based applications for the sports, entertainment and media industries, including for tickets and Franchise sales, etc. Shari Glazer intends to use her blockchain knowledge and her extensive network of family, personal and professional contacts in these industries to pitch the upcoming tokens and applications of new venture Venture.

In summer 2021, Shari Glazer was introduced to software engineer Mo Shaikh, and then in August 2021, Swoon Capital signed a consulting agreement with Mo Shaikh, under which Mo Shaikh will help Swoon Capital and Shari Glazer in the existing Find a suitable acquisition target in the blockchain project, and it can be reapplied in the Venture ecology. At the same time, Swoon Capital will pay Mo Shaikh US$35,000 as a reward. The consulting agreement contained strict non-disclosure, non-compete and non-solicitation clauses (ie, the partnering firm could not solicit its own employees, clients or business), prohibiting Shaikh from divulging Shari Glazer's business plan and otherwise competing with Swoon Capital.

Glazer and Shaikh then had several exchanges in New York City to expedite the development of the new venture, Venture, during which Glazer disclosed to Shaikh her confidential business plans for the Venture. Later, Shaikh proposed to Glazer to revise the Venture's business plan, suggesting that a team of engineers be directly formed to develop a new, scalable blockchain network, rather than acquiring and repurposing existing blockchain projects.

At the same time, Shaikh told Shari Glazer that he could find the required team of engineers from a mainstream social media platform to develop Venture's blockchain network. Shortly after, Shari Glazer agreed to amend the Venture and also agreed to make Shaikh a partner in Venture, with the two each owning 50% of the company, based on Shaikh's ability to provide Venture with top engineering talent. Over the next few months, Shari Glazer and Shaikh held multiple daily conference calls to discuss the Venture's business plan as well as future development plans.

As a partner, in addition to introducing Shaikh to her extensive sports, media and blockchain industry contacts, Glazer agreed to make an initial investment of $10 million in the Venture (or more, if necessary), and also received funding from a The global media and entertainment group received an additional $10 million in financing commitments, and the group will not only invest in Venture, but also become one of Venture's most important initial strategic partners and users of the Venture blockchain.

Shari Glazer and Shaikh then agreed that these investment funds would provide the Venture with sufficient liquidity to initiate the development of its blockchain network without the need for external venture capital financing, which would dilute the value of their equity as founders. Glazer also said she provided entertainment and expensive lunches for some engineers to help convince them to join the Venture team.

But after Shari Glazer formed the team, she discovered that Shaikh had secretly established a new corporate entity (Matonee Inc.), and that Shaikh was the president of the new company, Matone, with 100% ownership of the company. In addition, Shaikh also deprived Shari Glazer of 50% of the ownership in the Venture, and shared this part of the interest with the engineers and A16Z.

To make matters worse, Glazer found that despite Shaikh saying he was not seeking VC funding and that VCs are the devil ", Shaikh and A16Z had finalized a $75 million investment in Venture in exchange for 7.5% ownership of Matonee. Shari Glazer also recently learned that Shaikh is seeking more than $200 million in funding from A16Z and other venture capital firms, based on a $2 billion valuation for Venture.

So Shari Glazer filed a lawsuit in court, accusing Shaikh of violating the agreement and depriving Shari Glazer of the legal ownership of the Venture through fraudulent behavior, demanding that Shaikh make corresponding compensation.

Shaikh's lawyers have rebutted Shari Glazer's lawsuit, filing documents calling Shari Glazer's claims "a work of fiction" and releasing transcripts of their WhatsApp messages and redactions of Shari Glazer's affidavit detailing details of the case Record. They argue that chats between Shaikh and Shari Glazer show that Shaikh made it clear that most of the talent he was trying to hire for the new company would need to be paid upwards of $1 million a year, so the amount Shari Glazer proposed was insufficient.

According to WhatsApp transcripts, Shaikh told Shari Glazer that the company needed “$75 million to $100 million” to get off the ground, and he also listed VCs who talked to him about the project, including A16Z, Coinbase, Multicoin, Paradigm, Pantera, and others. .

At present, the two sides hold their own opinions, and the case is also being heard by the Supreme Court of New York State. If the lawsuit is established, the subsequent development of the public chain Aptos may be greatly affected.