A few weeks ago, we declared the faked Solana TVL story the strangest story of the year.
Well, it appears their reign atop the leaderboard was short-lived…
This week Crypto Leaks, a crypto whistleblower, alleged that Ava Labs, the company behind the fourth largest layer-1 blockchain Avalanche (AVAX), used litigation to damage competitors and draw regulatory attention away from themselves.
There’s a lot to unpack here, so let’s get into it.
In the investigation, Crypto Leaks claims that Ava Labs and law firm Roche Freedman made a dirty deal to sue competitors and use regulation as a way to gain market share.
Basically, Crypto Leaks alleges that Roche Freedman founding partner Kyle Roche was given 1% of the AVAX token supply in exchange for:
- Suing competitors “gangster style” to damage them
- Suing crypto industry actors to draw regulatory attention away from Ava Labs
- Suing the personal enemies of Ava Labs Founder and CEO Emin Gün Sirer
These are serious allegations, and nobody would take them seriously if they were just words on the screen. But, unfortunately for Ava Labs, the article contains videos of Kyle Roche admitting to everything that Crypto Leaks accuses him of doing.
Talk is cheap, but video is pretty damning evidence. Right?
Both Emin Gün Sirer and Kyle Roche released responses on Monday that pretty much amounted to calling the exposé fake news.
Emin’s statement claims that the article was all lies, Crypto Leaks itself is disreputable, and that not only is there no secret pact with Roche, but there is no legal arrangement with Roche period.
Roche, in his response, does not deny that the videos are real, just that they are highly edited, misleading, and illegally obtained. To him, this whole thing is nothing more than a hit job.
So, Who’s Telling The Truth?
It’s a cop-out answer, but we genuinely have no clue which side is telling the truth.
On the one hand, as Twitter personality Cobie eloquently pointed out, pretty much everything about the story is fishy. The story’s tone, the questionable integrity of Crypto Leaks, and the apparent conflict of interest between Crypto Leaks and Internet Computer are all major red flags.
On the other hand, the videos exist, and they definitely don’t look great. We have no way of knowing if the videos are edited. All we know for sure is what we see, and what we see are tapes of Roche admitting to everything Crypto Leaks alleges. That’s hard to ignore.
In any case, it seems AVAX investors are not too happy with the token trading ~11% down from where it was before the story dropped, and that number will likely increase should more evidence be released.