Every blockchain enthusiast must have heard of Augur, a prediction market system that runs on the ethereum blockchain. With only a handful of developers on their team, Augur has successfully devised a decentralized protocol where outcomes of events can be forecasted in a trustless, peer-to-peer manner and rewarded for accuracy with the financial incentive of a native cryptocurrency. It is basically a sophisticated system of betting.
With Augur’s main network set to launch in July, the market is abuzz with excitement about the launch. However, the market is also abuzz with the controversial lawsuit that Augur members have courted.
Matthew Liston, a former associate of Augur has dragged four Augur associates to court, accusing that angel investor Joseph Ball Costello, and three other founding members, Jack Peterson, Joseph Charles Krug and Jeremy Gardner committed fraud, breach of contract, and trade theft in relation to the situation that arose out of Liston’s termination from the company and his stake in Augur’s token distribution, leaving him empty-handed.
The market capitalization of Augur (REP) was $455 million at the time of publication. Liston is seeking $38 million in general damages and $114 million in punitive damages for a total of $152 million in collective damages — more than one-quarter of REP’s market value.
Liston’s lawsuit is being hailed as the most important private lawsuit in cryptocurrency history. Krug, who still advises Augur, has denied the lawsuit’s claims.
“The claims are baseless and inaccurate,” Krug said in a statement he delivered. Liston, he said, “accepted a cash severance payment and he signed a full release with Dyffy, and we’re appalled that he’s turned around with a lawsuit three years later.”
The court has called both sides for a hearing in September 2018. The case will be taken up by a judge and the trial date will be set.