Brian Armstrong, the Chief Executive Officer (CEO) of Coinbase Global Inc is currently embroiled in an Intellectual Property lawsuit with Knowledgr, a startup that Armstrong himself is invested in. As reported by CNet, the lawsuit was filed on Friday by MouseBelt Labs, a startup that has an active investment in Knowledgr.
As detailed in the lawsuit, Armstrong has his own personal project named ResearchHub with a close similarity to Knowledgr, and after learning of the latter project, he offered the owner of the project a financial investment as well as the opportunity to list the platform’s tokens on Coinbase. Based on the financial standing of Patrick Joyce, Knowledgr founder at the time, refusing the offer was not an option.
Alongside the Coinbase CEO, MouseBelt Labs said it also invested in the startup, and that it imputed its resources in helping to develop the Knowledgr protocol. The claimant said Armstrong “weaseled” his way into gaining a controlling interest in the project and diluting MouseBelt’s investment. The lawsuit alleges that Armstrong made investments into Knowledgr without having the intentions of helping the project proceed with its launch in order to give undue advantage to his own startup.
“It was Armstrong’s and the other Defendants’ intent to steal MouseBelt’s work for themselves, to not only eliminate a potential competitor but to obtain for ResearchHub the benefits of the financial, design, and technical resources MouseBelt put into Knowledgr, thereby allowing ResearchHub to launch sooner at less cost a successful platform based entirely or substantially on MouseBelt’s work,” MouseBelt alleges in its complaint.
Bad Image for the Coinbase CEO
The digital currency ecosystem is replete with a lot of innovative projects and the space hardly faces intellectual property theft. The MouseBelt induced lawsuit is bad for the image of Brian Armstrong and the entire Coinbase ecosystem with its impressive frontiers in the space.
While the Coinbase CEO has not been pronounced guilty per the allegations, the industry perception can be significantly swayed, a scenario that can impact the trading platform business if not handled properly. When the United States Securities and Exchange Commission (SEC) launched its $1.3 billion lawsuits against Ripple for selling XRP coins as security, the company experienced bad optics and lost its long-term business partner, MoneyGram with the price of XRP plunging remarkably.
Such reactions can be prepared for, especially with a publicly-traded company like Coinbase Global.