Is Eclipse Labs Founder Neel Somani’s Resignation Amidst Sexual Misconduct Allegations Adding to Crypto’s Woes?

Neel Somani, the founder and CEO of the Ethereum layer 2 blockchain project Eclipse, made headlines last week as he announced stepping back from his role temporarily amidst allegations of sexual misconduct.

In his statement, Somani vehemently denied the accusations, stressing the importance of a comprehensive investigation.

He emphasized:

"Serious allegations about sexual misconduct warrant a serious and thoughtful response.”

Somani reiterated his innocence, stating that he has never been involved in any form of sexual assault or harassment, and expressed his determination to clear his name.

In response to the allegations, he chose to relinquish his public-facing position, trusting Eclipse's senior leadership to manage affairs in his absence.

He expressed optimism that open dialogue would ultimately uncover the truth.

However, on 16 May, Eclipse Labs announced Neel Somani's departure as CEO.

Vijay Chetty, the former chief growth officer, assumes the CEO role.

Chetty brings a wealth of experience from leading roles at Uniswap Labs, dYdX Trading, Ripple Labs, and investment expertise from BlackRock.

Eclipse Labs did not disclose the reason for Somani's departure.

Despite the allegations, which remain unproven in court, Somani maintains his innocence.

As of 19 November, over six months after the incident, no legal charges have been filed.

Eclipse Labs Responded

As the situation unfolded last week, Eclipse promptly reaffirmed its commitment to a comprehensive investigation, underscoring its values of transparency and accountability.

While Somani chose to temporarily step back, Eclipse remains steadfast in its dedication to its mission, providing assurance to its community amidst this challenging time.

Eclipse declared:

“Our team takes allegations against our CEO, Neel Somani, seriously and believes in the importance of truth."

And effective immediately as of 16 May, Eclipse Labs announced the appointment of Vijay Chetty as CEO, succeeding Somani who is stepping down from his role.

Eclipse mentioned:

"Chetty brings over a decade of crypto-native experience to the helm, having held leadership positions at Uniswap Labs, dYdX Trading, and Ripple Labs in addition to his investing experience at BlackRock.”

Chetty also gave his reassurance.

Eclipse Labs Secured $50M in Funding

Eclipse recently closed a Series A funding round, securing $50 million in preparation for its mainnet launch.

This round, co-led by Placeholder and Hack VC, propelled the company's total fundraising efforts to $65 million.

However, on 16 May, Hack VC expressed deep concern over recent serious allegations against Somani.

The firm took decisive action, including advocating for Somani's resignation, which has now been realised.

The World of Crypto Has a "Colourful" Repertoire of Crimes

In the complex landscape of the crypto world, where crimes like money laundering, wire fraud, phishing scams, terrorism financing, and more, are unfortunately prevalent, the emergence of sexual misconduct allegations adds another layer of concern.

In 2022, Gem.xyz, a startup, ousted a core developer known as Neso, a major shareholder, after investigating allegations of sexual misconduct.

The individual in question is Josh Thompson, also known as Joshpriest and MethodJosh, a World of Warcraft streamer accused of rape, sexual harassment, and grooming minors in 2020.

Allegations surfaced that Thompson made advances toward victims when they were 13 and 14 years old.

Prior to this, Bitcoin Core developer Peter Todd faced accusations of sexual misconduct.

Two alleged victims recounted incidents within the bitcoin community, occurring at professional events or private meetings discussing computer science topics.

Both women described their encounters as traumatic.

Amidst the myriad of crimes already present in the crypto world, the emergence of sexual misconduct allegations begs the question: will it exacerbate an already precarious situation?