The Zerocoin Electric Coin Company, developers and operators of cryptocurrency ZCash (ZEC), have been dragged to court by a former employee on charges of unethical business practices and unpaid stock options.
According to an official document filed with the Superior Court of California for the County of San Francisco, Simon Liu, a former employee of Zerocoin, is suing the company for not paying him over $2 million in outstanding stock options.
The documents, which were initially filed on May 29, revealed that Liu was hired by Zerocoin in August 2016 as a Senior Software Engineer, with an agreement that saw him receive “incentive stock options to purchase” 12,000 units off the company’s stock. However, two months later, the agreement was modified by the company, and Liu was awarded an additional 3,000 stock points, bringing his total stock tally to 15,000 units.
Liu eventually resigned from the company on May 28, 2019, and is now arguing that Zerocoin wasn’t legally authorized to issue those stock options back when he was hired. In addition to this, he claimed that the company understood their situation and went on to issue the options anyway.
He also claimed to have been misled into thinking that he’d get “Founders Reward” based on the company’s outstanding shares, which, at the time, were 1,345,486 units.
Liu additionally claimed to have requested a look into Zerocoin’s books. His proposals were rebuffed, and he went on to file the suit as a last resort.
The company issued a response to Liu’s claims saying that they were unable to fulfill their obligation to him because of the effects of last year’s crypto winter. The company claimed that the crypto winter has affected both ZEC and Zerocoin, dragging the latter’s valuation down significantly.
Data from CoinMarketCap a data bank for exchanges and for bitcoin trading, does seem to affirm Zerocoin’s rebuttal. Per data from the platform, ZEC trades at $83.72 at press time, with a $564 million market cap. At the currency’s peak, it had a $2.6 billion market cap and a token price of $710.
However, even if they were able to make the payments to Liu, there’s still a question of whether Zerocoin should have been offering stock options in the first place, since, according to the ex-employee, they weren’t legally authorized to do so.
A similar case was reported two months ago, when Jonathan Silverman, a former employee of cryptocurrency exchang Kraken, sued the company over $900,000 in outstanding commissions.
Silverman was hired to head Kraken’s New York trading desk back in 2017, and while he had an agreement in principle with the company (to receive a base salary, stock options, and a 10 percent commission of the trading desk’s profits), he sued them nonetheless, claiming that they failed to pony up his commissions and stock rewards after he jumped ship.