Orbs Co-Founder Sues The Blockchain Firm For Fraud

Co-founders of the Israel-based blockchain firm, Orbs, are reportedly being sued by an ex-partner, Elad Arad, for the dissolution of his share in a failed integrated venture called Cointree Capital.

According to Globes, an Israeli business media, Arad is suing partners Orbs, Cointree Management Microverse, Uriel and Daniel Peled, HexaLabs and Hexa solutions for a failed 18-month-long mediation in Tel Aviv court.

Arad claimed that the above consigned “conspiracy, deceit, and serious fraud, as well as unlawful enrichment.”The official report claims that the brothers breached the fiduciary duty, and for breach of contract and commitments, oppression of a shareholder who is a minority, negligence, and theft of commercial secrets.

Reports explainthat the lawsuit could extendinto the tens of millions of dollars as Arad is demanding a proper settlement from the Elad brothers of 12 separate digital currency offerings including Orbs, Leadcoin,sirin, Kin and Stox.

Arad accuses the brothers of allocatinghis CointreeCapital shares towards Hexa, which is a non-profit blockchain foundation. From the lawsuit:

“The respondents (the Peledbrothers) exploited CointreeCapital’s business opportunities to set up new companies based upon new opportunities in the new world of virtual currencies, as well as ideas and plans of CointreeCapital.”

Orbs started in 2017 with its firstcoin offering following in May 2018. It gained an amount $118 million. A $15 million investment was made last December from the Korean firm, Kakao Investments. 

Furthermore, transactions between Orbs and two large ICO’s called Kik and Sirin Labs are recorded. Arad says that he was the intermediary between Kik and the Peledbrothers before they scammed him. Currently, Kik is under verification of the SEC for an unregistered securities offering. Sirin Labs CEO, Moshe Hogeg, was given two months’ time by an Israeli judge to settle an investment dispute charge with a Chinese investor earlier in 2019. The current association between Sirin Labs, Kik and Orbs is uncertain.

Responding to the lawsuit, Orbs says the Arad’s demands are unremarkable and impossible to follow through. “We have not yet managed to study the claim documents, which were sent to us at the same time as they were distributed to the press and media,” they wrote.

“Unfortunately, the statement of claim did not surprise us, and follows previous attempts and threats on the part of the claimant.”In previous reports in July, Orbs was asked by the White House to build out a blockchain-based peace plan for the continuing hostilities between Palestine and Israel. The proposal called “Peace to Prosperity” required Orbs to develop a blockchain-based land registry system.