In a series of brief, undercover videos published on a little-known website Friday, lawyer Kyle Roche bragged of his close ties to the founder of the Avalanche blockchain and seemed to suggest he had filed frivolous lawsuits in a bid to weaken its competitors.
Avalanche’s native token, AVAX, has fared worse than other major cryptocurrencies over the weekend, dropping more than 15% since Friday, according to data from The Defiant Terminal. AVAX is one of the world’s 20 largest cryptocurrencies by market capitalization.
ETH Price + BTC Price + AVAX Price + SOL Price + BNB Price + XRP Price + ADA Price, Source: The Defiant Terminal
On Monday, Roche and Avalanche founder Emin Gün Sirer fired back.
In a statement, Sirer called a report accompanying the videos a “scurrilous hit-piece” and said Roche had misrepresented his work for Ava Labs, the company behind Avalanche, in an attempt to “impress a potential business partner.”
In a separate statement, Roche accused the group that published the videos of harboring ulterior motives and of a “deliberate scheme to intoxicate, and then exploit me, using leading questions.”
The man who recorded the videos, Roche said, “requested a meeting with me under the false pretense of venture capital investment in a technology startup, but his real motives are now clear: to deceive and entrap me.”
Crypto Leaks, the website that published the videos, purports to reveal wrongdoing and market manipulation in the crypto industry. The Ava Labs report is its third; earlier reports allege manipulation of ICP, the governance token of the Internet Computer blockchain, and accuse crypto research firm Arkham Intelligence and the New York Times of colluding to damage the reputation of Internet Computer.
Roche – and other observers – believe that Crypto Leaks is likely supported by Dfinity, the company behind Internet Computer. The website does not reveal the identities of its sponsors or supporters.
“These videos were recorded without my consent during private meetings with Christen Ager-Hanssen,” Roche said in his statement, “whom I now know works for Dominic Williams, the creator of ICP Token, and the defendant in a high-profile securities fraud litigation my firm brought against him.”
Nevertheless, the videos, filmed surreptitiously during meetings in an office space and at a restaurant, have raised eyebrows in the industry.
When reached for comment, Crypto Leaks did not acknowledge Roche’s charge that they were working on behalf of Williams, creator of the ICP token.
“Alcohol loosens your lips, it does not make you invent fantasies,” Crypto Leaks told The Defiant in an unsigned email. “The idea that an experienced lawyer could be led into making false statement after false statement is laughable.”
‘Litigation Can Be A Tool’
In them, Roche brags of having been given 1% of AVAX, Avalanche’s native token, in exchange for legal services, and of living with Ava Labs COO Kevin Sekniqi in Miami. (Sirer has called the allegation that Roche owns 1% of AVAX a “blatant lie.”)
“Because I sue half the companies in this space, I know where the market is going,” he tells his offscreen interlocutor in one of the videos. “I’ve seen the insides of every single crypto company.”
In another video, he says he makes sure US regulators “have other magnets to go after … litigation can be a tool to competition.”
When asked by someone offscreen whether Ava Labs had ever sued a competitor, he responded, “No, they have me to do that, on behalf of the class. … so I can sue Solana.”
The Crypto Leaks report takes these comments a step further, claiming that they are clear evidence that Roche uses the discovery process in American litigation to steal competitors’ trade secrets for Ava Labs and uses class-action lawsuits to draw regulators’ attention to its competitors. Among other things, it cites a class-action lawsuit Roche filed on behalf of people who purchased Solana’s SOL tokens, which he alleges are unregistered securities.
“Until proven otherwise, we must assume that Ava Labs may even have directed Roche Freedman as to what confidential information they should harvest from the industry,” Crypto Leaks wrote.
The report even goes out of its way to speculate as to whether Roche meets the clinical definition of a “psychopath,” citing comments he makes in one of the videos.
Roche and Sirer have denied that they have a “secret pact” to wield litigation as a weapon against competitors in exchange for AVAX tokens.
Roche said his comments in the video “are highly edited and spliced out of context.”
Roche “has only represented Ava Labs in a defensive capacity in a couple run-of-the-mill corporate contract disputes and myself in a libel case,” Sirer said in his statement. “His firm is one of more than a dozen law firms we employ.”
Sirer also insisted that Ava Labs has nothing to do with the lawsuits Roche files, and in fact, tried to convince him to drop the Solana case after learning of it in the press.
“Let me be absolutely clear: we do not engage in or support any underhanded tactics suggested in the article or the video clips,” Sirer said.
“We believe in what we are building and do not need secret pacts or behind-the-scenes intrigue.”
UPDATED on 8/31 @ 11am ET with comment from Crypto Leaks