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Avalanche Down 10% on Whistleblower Damage

Avalanche Down 10% on Whistleblower Damage

Last updated 30th Nov 2022
Disclosure
  • Law firm Roche Freedman would collect classified information on rival companies and file class action lawsuits
  • Ava Labs CEO Emin Gün Sirer called the report ‘conspiracy theory nonsense'

On Monday, AVAX, the native token of Avalanche blockchain, fell to its lowest since July 13 after Crypto Leaks, a self-proclaimed whistleblower, accused Ava Labs of paying attorneys to keep regulators at bay and inflict damage on the competition. Ava Labs is the company behind Avalanche.

Ava Labs’ clandestine deal with Roche Freedman

According to a report, Ava Labs and law firm Roche Freedman reached an agreement, under which the firm would collect classified information of rival companies and file class action lawsuits in exchange for huge volumes of AVAX tokens and stocks in Ava Labs. The report stated:

We can reveal that the pact directs Roche Freedman and their leader Kyle Roche, to use the American legal system - gangster style - to attack and harm crypto organizations and projects that might compete with Ava Labs or Avalanche in some way and sue crypto industry actors with the aim of creating magnets for regulators such as the SEC and CFTC that distract them from the highly commercial nature of Ava Labs and the Avalanche blockchain.

AVAX down 18% in a week

AVAX slid to 16th position by market cap, losing 10% in the past 24 hours and more than 18% in the past seven days, CoinMarketCap data shows.

AVAX was the only cryptocurrency on Monday with a market cap of at least $1 billion to record a double-digit percentage loss in 24 hours. Other major cryptos only lost up to 5% today.

Investors: This is ‘disturbing’

Ava Labs CEO and founder Emin Gün Sirer called the report ‘conspiracy theory nonsense,’ but it attracted the attention of major industry players.

Some leading investors called it ‘disturbing,’ while others wondered whether both Ava Labs and Roche Freedman will draw the ire of legislators for their questionable business deal.

CZ: The report is ‘wild’

Binance founder and CEO Changpeng Zhao tweeted that the report was ‘wild.’ The tweet has been deleted, but it assumes the evidence provided by the whistleblower is legitimate. According to CZ, the target was Binance, although the centralized exchange is not Avalanche’s direct competitor.

Last year, Avalanche became wildly popular along with a few other blockchains alternative to the Ethereum Mainnet due to the latter’s excessive transaction costs. AVAX gained more than 3,000% last year, hitting an all-time high above $140.

Daniela Kirova

Daniela Kirova

Daniela is a writer at Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. She has over 15 years of experience as a writer, having ghostwritten for several online publications in the financial sector.