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Ava Labs Evil Conspiracy by Crypto Leaks

Posted August 29, 2022 9:35 pm
6 min
By Jethro Sandico

Ava Labs, the company behind the Avalanche blockchain, has been fighting off some allegations in an article published on August 26, 2022 by self-described crypto community whistleblower Crypto Leaks.

The article tries to implicate Ava Labs along with law firm Roche Freedman, in a series of claims including deceiving regulators and harming competitors. According to Crypto Leaks, they can “reveal that for several years they (Ava Labs and Roche Freedman) have been operating according to an extraordinary secret pact that harms the crypto industry.”

The Crypto Leaks article is currently spreading like wildfire due to paid promotions that were boosting it on social media and a since deleted Tweet by CZ, CEO of Binance. Aside from attacking Ava Labs and Roche Freedman from a business standpoint, the writeup also blasted the heads of both entities at a personal level.

Ava Labs Founder and CEO Refutes Claims

Emin Gun Sirer Ava Labs Founder and CEO

Ava Labs founder and CEO Emin Gün Sirer brushed off what he thought was just plain absurd information being peddled by the website.

“How could anyone believe something so ridiculous as the conspiracy theory nonsense on Crypto Leaks? We would never engage in the unlawful, unethical and just plain wrong behavior claimed in these self-serving videos and inflammatory articles. Our tech & team speak for themselves,” Sirer Tweeted.

The former Cornell University professor also responded with an official statement saying that he would normally avoid countering against a “scurrilous hit-piece on disreputable websites like Cryptoleaks.”

In his written piece, Sirer clarified his company’s relationship with Roche, dispelling myths that the lawyer is on Ava Labs’ executive team, handling business and legal decisions, as well as regulatory matters. 

He also pointed out that Roche “has only represented Ava Labs in a defensive capacity,” and that he has “filed all their lawsuits independently of us,” citing the case against Solana as an example of a lawsuit that his company wasn’t aware of.

“Let me be absolutely clear: we do not engage in or support any underhanded tactics suggested in the article or the video clips. We believe in what we are building and do not need secret pacts or behind-the-scenes intrigue,” Sirer reiterated.

Video Footages and Statement by Roche

Kyle Roche partner at Roche Freedman

The lengthy article presented videos of Kyle Roche giving blatant details to the “schemes” that Crypto Leaks is throwing against Ava Labs. One footage even showed Roche saying “obviously I’m biased, I have an interest in Ava Labs,” which is a reference to allegations that Sirer paid the legal counsel with $AVAX tokens and Ava Labs stocks, in return for his services. 

In a statement, Roche did not deny the veracity of the videos, explaining that the footage was taken during a meeting with Christen Ager-Hanssen, who the lawyer believes currently works for Dominic Williams, the creator of ICP Token. According to Roche, Williams is a defendant in a “high-profile securities fraud litigation” that his law firm brought against him.

Believing that the meeting was organized to “deceive and entrap” him, Roche remained adamant against the accusations.

“Mr. Ager-Hansen and Mr. Williams brazen attempts to intimidate me, my firm, and the class we represent will not work. We will remain resolute in defending ourselves against their underhanded, false and deceptive tactics against us,” Roche stated.

Summary of Accusations and Counterpoints

Here are some of the accusations against Ava Labs and Roche Freedman:

  • Attacks on Competitors: Crypto Leaks accused Ava Labs and Roche Freedman of attacking competitors, one of them being Solana, by claiming that the popular ecosystem’s native token $SOL is an illegal security.
    • Our view: It is important to note that this move – if proven true – could also hurt Avalanche’s native token $AVAX, as well as other cryptocurrencies. Hence why we don’t believe these allegations make sense.

  • Deceiving Regulators: Believing that Ava Labs is “luring regulators” away from the company, Crypto Leaks claim that Sirer et al., is drawing the attention of regulators towards other networks.
    • Our view: However, regulations are all-encompassing and will ultimately affect all parties on the blockchain as soon as they are enforced by an oversight agency such as the Securities and Exchange Commission (SEC).

  • Pumping $AVAX Price: Crypto Leaks also attacked Ava Labs and Roche Freedman’s alleged efforts to “surreptitiously increase the price” of $AVAX in a “ruthless and highly commercial manner.”
    • Some critics think that these statements seem contradictory to each other, since it is not easy to secretly pump the price of an asset using means that require massive marketing and promotion. 

  • Harvesting Personal Info: The video footage shows Roche boasting that he can sue an individual or a company and demand access to their confidential accounts, as well as “commercial data, email, and social media communications,” among others. 

Binance and Ripple Involvements that Have Been Repudiated

Cryptocurrency exchange Binance is one of the companies being portrayed as a victim by the Crypto Leaks’ article. However, it is a well-known fact that Avalanche and Binance have been working as partners, with their ecosystems sharing and bridging projects, in a bid to promote cross-chain cooperation.

Self-proclaimed Terra Insider FatMan pointed out that Binance was never sued by Ava Labs, adding that “victims from our group filed through Roche Freedman due to Binance’s irresponsible marketing (eg. “UST is fiat-backed”).

Brad Garlinghouse (@bgarlinghouse) / Twitter

Some entities that were dragged into the conversation include payment protocol and exchange network Ripple. Crypto Leaks claims Roche represented the company before the lawyer founded his own law firm. 

Ripple CEO Brad Garlinghouse immediately repudiated such claims.

“I can’t comment on the validity of the slew of allegations in here, but I can unequivocally say that I have never met or spoken to (much less invested in) Kyle Roche,” Garlinghouse said.

About Ava Labs

Ava Labs is the company that developed Avalanche blockchain, which is widely-considered as one of the fastest smart contracts today. The network is currently increasing its presence in the market by nurturing games and NFTs with the help of subnets as scaling solutions.

On April 14, 2022, Ava Labs raised $350 million in its latest funding round, bringing the company’s valuation to $5.25 billion, according to Bloomberg.

About Roche Freedman

According to the law firm headed by Kyle Roche, Roche Freedman LLP “specializes in resolving complex, high-stakes legal disputes” for individuals and corporations that require “innovative and tech-savvy legal counsel.”

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