The AVAX coin fell to a new ATL after a self-proclaimed whistleblower claimed that Avalanche used litigation as a weapon against its competitors

By: Mark Jessy

The AVAX coin fell to a new ATL after a self-proclaimed whistleblower claimed that Avalanche used litigation as a weapon against its competitors

August 30, 2022 7:02 AM

As a result of allegations made by a self-described "whistleblower" website that Ava Labs, the company behind the Avalanche blockchain, bribed lawyers to harm rivals and ward off regulators, the price of the AVAX token fell to its lowest level since July 13 on Monday.

 

In a report released on Friday, self-described whistleblower Crypto Leaks claimed that New York-based Ava Labs, which was working to build Avalanche's ecosystem, struck a deal with law firm Roche Freedman in which Freedman agreed to gather sensitive information from competitors and file class-action lawsuits against them in exchange for sizable amounts of AVAX tokens and Ava Labs common stock.

 

From the report:

"We can reveal that the pact commands Roche Freedman and their leader Kyle Roche to: 1) use the American legal system - gangster style - to attack and harm crypto projects and organizations that might compete with Ava Labs or Avalanche in some way, 2) sue crypto industry actors generally with the goal of creating magnets for regulators such as the SEC and CFTC that distract them from the highly commercial nature of Ava Labs and the Avalanche blockchain, and 3) covertly pursue."

 

According to data from Coinmarketcap, AVAX has lost 11% of its value in the last day alone, falling 22% from $23 to $17.90 since Friday. As of the time of writing, AVAX was the only cryptocurrency with a 24-hour price decrease in double digits and a market size of at least $1 billion. At the time of publication, bitcoin, ether, and other significant cryptocurrencies were down 1% to 5%.

 

Ava Labs' founder and CEO Emin Gün Sirer criticized the article as "conspiracy theory drivel."


Industry leaders have taken notice of the findings, though; some have called it unsettling while others have questioned whether both sides will now be subject to legal scrutiny for a problematic incentive relationship.

 

This must be true, and it must be as horrible as it seems. fits in with everything I've seen from Sirer and Roche before. Several weeks ago, Roche received the following message: "dumber iteration of mob attorneys. the absolute bottom of the barrel" https://t.co/H5eDpvY4Ng 29 August 2022 — Ari Paul (@AriDavidPaul)

 

 

While everything was going on, Binance CEO Changpeng Zhao, presuming the veracity of the proof videos published by Crypto Leaks, referred to the claim as "crazy" in a since-deleted tweet. Despite the fact that the controlled exchange isn't a direct rival of Avalanche, Zhao claimed that Binance was the target.

 

 

Taking to Twitter on Monday, Ripple Labs CEO Brad Garlinghouse refuted a claim made in the Crypto Leaks report that he had met or communicated with (much less invested in) Kyle Roche.

 

 

Due of the high transaction costs on the Ethereum blockchain, Avalanche gained popularity with other layer 1 blockchains last year. AVAX increased by a staggering 3,300% in 2021, reaching all-time highs of almost $140.

 

The token reached its top in November along with the whole market as the U.S. Federal Reserve turned its attention to monetary tightening and inflation control. Since then, the market value of cryptocurrencies has decreased from $3 trillion to under $1 trillion. After reaching a record high of $69,000 in November, the value of Bitcoin, the most valuable cryptocurrency by market cap, dropped below $20,000 early on Monday.