NFT Founder Accused of Multi-Million Dollar Bitcoin Project Fraud
A legal battle is brewing in Illinois, where several investors of the Hashling NFT project are accusing its founder, Jonathan Mills, of defrauding them of millions of dollars. The lawsuit, filed on May 14th, alleges that Mills misappropriated funds from both the NFT project and a related Bitcoin mining operation, Satoshi Labs LLC (formerly Proof of Work Labs LLC).
The plaintiffs claim Mills, who is also CEO of Satoshi Labs, deceptively transferred assets to his holding company, leaving them with no equity returns as promised. They cite two NFT drops on Solana and Bitcoin blockchains, raising a combined $1.46 million, with no returns to the investors.
The lawsuit alleges fraud and breach of fiduciary duty. The plaintiffs argue a flawed shareholder agreement, giving Mills a 67% equity share in Satoshi Labs while other investors received a mere 2% despite their $20,000 investments, further supports their claims of deception.
Adding to the allegations, Mills allegedly ignored the investors after the funds were transferred, creating the shareholder agreement to mask his actions. He allegedly assured investors their equity would remain unchanged despite the company’s name change, maintaining his significant voting power.
Cointelegraph reached out to Mills for comment but has yet to receive a response. The plaintiffs’ attorney, Clinton Ind of Ind Legal Group LLC, speaking to Law360, described Mills’ initial involvement as having “a willingness to help push the project forward.” However, this initial enthusiasm allegedly masked a scheme to misappropriate investor funds.
Interestingly, the plaintiffs claim that Mills admitted to lacking NFT experience when initially proposing the Hashling NFT project. Despite this, he reportedly recruited other investors, including his girlfriend, to participate in the venture. The lawsuit seeks a constructive trust over the project’s assets and full restitution for the plaintiffs.
This case highlights the risks associated with NFT investments and the importance of thorough due diligence before participating in such projects. The legal battle ahead will determine the validity of these serious accusations against Mills.