Benzinga | Dec 22, 2021 09:52AM EST

Lawsuit Alleges Coinbase CEO Brian Armstrong 'Stole Ideas' From Blockchain Startup

Blockchain accelerator MouseBelt Labs claims that Coinbase Global Inc (NASDAQ:COIN) CEO Brian Armstrong stole ideas from a competing project Knowledgr in a lawsuit filed last Friday.

What Happened: According to a report from CNET, the lawsuit alleges that Armstrong's ResearchHub -- a platform that uses tradeable tokens in publishing academic research -- stole the work of Knowledgr, a blockchain startup that was similar in design and function.

MouseBelt had already invested in Knowledgr and claims that Armstrong and other defendants intended to steal MouseBelt's work for themselves by diverting proprietary assets to ResearchHub and eliminating a potential rival.

"It was Armstrong's and the other Defendants' intent to steal MouseBelt's work for themselves, to not only eliminate a potential competitor but to obtain for ResearchHub the benefits of the financial, design, and technical resources MouseBelt put into Knowledgr, thereby allowing ResearchHub to launch sooner at less cost a successful platform based entirely or substantially on MouseBelt's work," stated MouseBelt in the complaint.

The lawsuit further alleges that Armstrong "elicited confidential information" under the guise of a potential investment by listing Knowledgr's token on the Coinbase exchange.

The Coinbase CEO supposedly later acquired a controlling interest in the platform, resulting in a dilution of MouseBelt's interest to "virtually nothing."

A statement from Coinbase spokesperson Elliot Suthers called MouseBelt's claims entirely frivolous, and the exchange said it plans to prove its case in court.

Price Action: Coinbase shares closed 4.05% higher at a price of $247.69 on Tuesday.

Photo: Courtesy of coinsbase.com