Legal Dispute Involving Hashling NFT
In a significant legal dispute, investors affiliated with the Hashling NFT project have leveled serious accusations against its founder, Jonathan Mills. They claim he has misappropriated funds amounting to millions, diverting profits not only from Hashling NFT but also from an associated Bitcoin mining venture.
According to a court document filed on May 14 in Illinois, the plaintiffs assert that Mills falsely represented the transfer of funds, including at least $3 million from the Bitcoin mining operation, to a company he established known as Satoshi Labs LLC (previously named Proof of Work Labs LLC).
Allegations and Investor Claims
The group of investors is taking legal action against Mills, alleging fraud and breaches of his fiduciary responsibilities. They contend they have not received the promised returns on their investments, despite raising a total of $1.46 million through two NFT drops on the Solana and Bitcoin blockchains. Reports indicate the investors have yet to see any of their anticipated equity returns.
Following the fundraising efforts, Mills allegedly ceased communication with the investors. They argue he constructed a flawed shareholder agreement to falsely substantiate his claim over the project’s assets, which they characterize as
“rife with errors.”
The agreement purportedly stated that Mills would hold a 67% equity stake in Proof of Work Labs while other investors contributed amounts of up to $20,000 for only 2% equity. Furthermore, despite a rebranding of the company, Mills allegedly assured these investors that their equity stakes would remain unaffected. He also retained 67% of the voting power concerning decisions within the company, significantly restricting the influence of other partners, none of whom held more than the aforementioned 2%.
Discussions and Legal Actions
In his initial discussions with plaintiff Dustin Steerman, Mills indicated a lack of funds and experience with NFTs, despite the two moving forward with the Hashling NFT project. Steerman’s legal representative, Clinton Ind of Ind Legal Group LLC, noted that, while Mills initially contributed ideas, he ultimately became less involved, leading to the current dispute.
Investors claimed that Mills even persuaded his girlfriend to invest in the Hashling NFTs initiative.
Demands from Investors
As part of their legal claim, the plaintiffs are not only seeking damages for fraud and breach of duty but are also demanding the establishment of a constructive trust over the project’s assets and full restitution of their investments. Cointelegraph reached out to Mills for comment; however, there was no immediate response from him.
