Avalanche bounces back after denials to Crypto Leaks claims
Avalanche founder and law firm partner strenuously deny Crypto Leaks accusations
Avalanche (AVAX) was trading at $19.68 earlier on Wednesday 31 August, up 12% over the past three days, in the wake of denials to a purported whistleblower report published by Crypto Leaks.
Ava Labs accused of serious misdeeds
Crypto Leaks, a self-described website for whistleblowers, published an extended article on 26 August claiming that Ava Labs, the group behind the Avalanche blockchain, had allegedly paid a law firm to begin several class-action lawsuits against competing cryptocurrency projects.
The report placed particular focus on the law firm Roche Freedman, alleging that Ava Labs paid it in tokens and equity to file adversarial litigation.
To support its claims, Crypto Leaks posted surreptitiously-recorded video of Roche Freedman partner Kyle Roche supposedly admitting that he makes sure that “the SEC and the CFTC have other magnets to go after”.
In another video, Roche said that instead of Ava Labs filing a complaint against a competitor “they have me do that on behalf of the class”. He then added: “Their name was never…” before he was interrupted.
Ava Labs founder slams claims as ‘nonsense’
The report also claimed that Ava Labs and Roche Freedman would “secretly pursue” the “personal vendettas” of Avalanche founder Emin Gün Sirer.
In response, Sirer lambasted Crypto Leaks as a “disreputable website” and said in a statement:
“I am disheartened to see people in the crypto space pay any attention to such obvious nonsense.”
Sirer added: “These claims evidently came about when Kyle Roche, a lawyer at a firm we retained in the early days of our company, tried to impress a potential business partner by making false claims about the nature of his work for Ava Labs.”
He added that neither he nor Ava Labs had ever directed Roche in his selection of cases and that the lawyer had only worked for the company in a defensive capacity and for Sirer in a libel case.
Sirer stressed that it has employed the services of over a dozen law firms and added:
“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.”
Lawyer accuses whistleblower of scheme to ‘intoxicate’ him
In a separate statement, Kyle Roche, founding partner of Roche Freedman, vigorously denied any allegations of impropriety:
“Ava Labs has had no input, control, or insight into any of our firm’s plaintiff-side class action cases and we have never filed a class action on their behalf or at their request.”
Kyle Roche continued: “Statements in the video to the contrary are false, and were obtained through deceptive means, including a deliberate scheme to intoxicate, and then exploit me, using leading questions.”
The strenuous rebuttals appear to have fuelled a 12% recovery from a low of $17.56 on Monday 29 August to $19.68 earlier on 31 August 2022, according to CoinMarketCap.