Blockchain Company Temujin Labs Sues Former Execs for ‘Naked Greed’

Temujin Labs, a corporation specializing in blockchain, Zero Knowledge Proofs and DeFi technologies, has filed a lawsuit against several former executives accusing them of starting a rival business with stolen intellectual property.

The lawsuit, filed in November 2021 in the US District Court of the Northern District of California, includes a long list of allegations against eight former employees of Temujin Labs, including trade secret misappropriation and misuse, trade libel, intentional interference with business contracts, civil conspiracy, and unfair competition.

Those former employees “hatched a plan” to undermine Temujin Labs and steal its intellectual property so they could form Espresso Systems – known then as Translucence Research Inc. – and continue to undermine their former company, the lawsuit said.

“In connection with that plan, they took advantage of their executive offices in Temujin Delaware, and the prestige and authority associated with them, and conspired among themselves and with others to destroy the credibility of the surviving co-founders, defame the very technology they were hired to create, unlawfully open-source highly sensitive Temujin codes, stir fear and foster mistrust among rank-and-file,” the lawsuit said.

The majority of the lawsuit’s allegations are focused on three former Temujin executives: Ben Fisch, Charles Lu, and Benedikt Bünz.

Following “the untimely death of Temujin’s co-founder John Powers in July 2020,” Lu, Fisch and Bünz decided to steal and transfer their company’s intellectual property and form Espresso Systems, according to the lawsuit.

“This is a case of predatory and predaceous corporate behavior, motivated by naked and objectionable greed of Lu, Fisch and Bünz, via depraved and unscrupulous methods, and loomed on the backdrop of misogyny,” the lawsuit said. “Plaintiffs are entitled to injunctive relief redressing these wrongs, as well as monetary, exemplary, and punitive damages.”

While the suit is primarily focused on those three defendants, it also names five other former Temujin employees that left the company to work at Espresso Systems with Lu, Fisch and Bünz. The remaining defendants are Nathan McCarty, a system engineer, Philippe Camacho Cortina, a senior cryptography engineer, and Fernando Krell, Binyi Chen and Luoyuan (Alex) Xiong, who all worked as cryptography engineers for Temujin.

While still working at Temujin, those employees helped Espresso Systems “in developing its own operations and in seeking financing” by stealing sensitive information from Temujin, the lawsuit said.

The lawsuit also refers to up to 20 other defendants that could potentially be named in the lawsuit as well.

“When their true names, capacities, and the extent of their involvement are ascertained, Plaintiffs will amend this Complaint,” the lawsuit said.

Temujin Labs offers a variety of products and services that “represent a significant advancement in the digital transaction processing space,” the lawsuit said, including a zero-knowledge-based ledger database, a peer-to-peer lending platform, a financial regulatory platform, a security issuance and transactional platform, a selective disclosure identity system, a commercial banking ledger system, a zero knowledge data warehouse, ZK Rollup and other associated systems.

The lawsuit said that Fisch, Lu and Bünz attempted to “poison” Temujin’s reputation with its employees and business partners in order to leave the company and form their competing business: Espresso Systems.

A selection of the accusations against Charles Lu:

• During Temujin’s “testnet period” on Amazon Web Service, Lu shut down the service and changed the developmental data in “an act of sabotage,” the lawsuit said.
• Lu tried to blackmail the company, demanding $5 million or he would spread rumors that Temujin founders were engaged in sex trafficking, selling drugs and were Chinese spies, the lawsuit said.
• Lu said “demeaning things to many Temujin employees,” and spread misogynistic rumors about a specific female employee, the lawsuit said.

A selection of the accusations against Benjamin Fisch:

• Fisch “defrauded” Temujin by asking for help developing research for a teaching position at a university, but “did not fulfill his obligations,” the lawsuit said.
• Fisch “fabricated” stories about internal strife at the company, and “once threw a bottle of water at an early founding team member in the office, frightening them from ever returning to the office again,” the lawsuit said.
• Fisch also tried to open-source Temujin’s proprietary source code, which comprises some of Temujin’s most valuable trade secrets, for the benefit of Espresso Systems, the lawsuit said.

For the “conspiracy” against Temujin Labs, the lawsuit is seeking declaratory relief, injunctive relief, compensatory and punitive damages, and attorneys’ fees.