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Executives central to the Findora mystery hit with lawsuit alleging fraud and embezzlement

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A newly filed lawsuit has shed some light on one of the most bizarre storylines to bubble up from the world of cryptocurrency.

Ariel Abittan, a New York-based investor who says he is a shareholder of Eian Labs, a U.S.-based DeFi startup that was rebranded to Findora in 2019, filed the suit on December 24 in California against two of Findora’s current principles, Lily Chao and Damien Leung, and Temujin Labs, the firm that now operates Findora. The suit accuses Chao and Leung of fraud and embezzlement. 

It is a countersuit to a complaint filed by Temujin Labs in November against Abittan and two Findora's former co-founders, Charles Lu and Benjamin Fisch. The larger dispute is over who is the rightful owner of Findora’s assets and intellectual property. 

Abittan's account provides some clues as to the reason that most of Findora's founding members have mysteriously disowned the project in recent months. But there are still more questions than answers about what exactly happened behind the scenes.

Who are Lily Chao and Damien Leung? 

According to the complaint, Abittan said he got to know Chao and Leung around May 2016, and the three worked together to run luxury watch businesses between 2016 and 2019.

At the time, according to Abittan, Chao went by the name Tiffany Chen (or Yuting Chen) and was married to Leung, who went by the name Tao Ding. Abittan said in the filing that in one instance, he wired money to “Wells Fargo bank accounts in the name of Yuting Chen and Tao Ding” to purchase watches from the couple.

Based on their existing business relationship, in 2018 the three jointly formed firms called Juniper Ventures and Eian Labs with external investment Abittan secured, according to the new filing.  

Abittan said upon founding the blockchain business, Chen told him she would change her alias to “Lily Chao” and Ding would change his to “Damien Leung.” 

Her name wasn’t the only thing she made up, according to the filing. “Chao also routinely lied to Findora investors and employees about her relationship with Ding, claiming that Ding was her brother-in-law and not her husband,” Abittan stated in his complaint. The alleged explanation was necessary due to the “Silicon Valley culture frowning on husband/wife relationships at work.”

Abittan further alleged that in July 2019, Chao and Leung “fraudulently induced” him to sign an agreement to divest Findora’s assets owned by Eian to Temujin, an entity over which neither he nor any other Eian investors had control.

Subsequently, the Findora project formally launched in July 2019 with a website that excluded Abittan’s name even though he claims he hired key members and advisors, including Lu (Findora’s co-founder and former CEO) and Fisch (co-founder and former CTO). 

What is Xipin?

In the November lawsuit that Findora filed against Abittan, the firm alleged that Abittan’s claim that he is entitled to Findora’s asset caused a massive resignation in October.

An investigation by The Block, however, revealed that much of the founding team jumped ship after discovering the two had solicited private token raises since June from Chinese investors without the rest of the team’s knowledge.

In his countersuit, Abittan accused Chao of appropriating Findora’s funds. He alleged that “Chao raised millions of dollars on behalf of Findora in private financings,” and transferred funds to a personal Binance account. He also alleges that she directed Findora’s team in China to wire “significant sums of money” to an e-commerce company called Xipin.

“Neither Plaintiff...nor Findora’s U.S. CEO at the time, was aware of any legitimate purpose for these transfers,” Abittan alleged in the complaint. 

Findora, Chao or Leung have not responded to The Block’s request for comment and clarification via email and direct messages.

But Chinese business registration records reveal that there are some connections between Findora and Xipin. Public data shows Xipin was incorporated on June 4 this year after the firm registered its website domain in April. 

Xipin’s previous shareholder was a firm called Shanghai Fengdou Technology. Fengdou’s business registration record in China shows it has a trademark of “findora.”

Xipin’s registration record shows Shanghai Fengdou transferred its stake in Xipin on September 25 to two Chens: Meili Chen and Jinzhen Chen. It’s unclear if Meili Chen or Jinzhen Chen is related to Lily Chao, whose real name is allegedly Tiffany Chen or Yuting Chen.

Xipin also registered an official WeChat account on June 11 and published several blogs regarding its e-commerce business. 

In a post on July 25, Xipin laid out its main team members, which included at least one person, Paul Sherer, that is currently listed on Findora’s website as a director of Findora Foundation.

In a July 14 WeChat post, Xipin also touted it received $5 million pre-Series A funding from a venture capital firm called Powerscale Capital, which was reported to have invested in Findora.

Abittan alleged in his suit that while Juniper Venture is the majority owner of Powerscale, “Chao and Powerscale never informed” him of the investment into Xipin.

Abittan_v_Chao_et_al by Wolfie Zhao on Scribd

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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I am a Blockchain News Bot. Everything I post is not my original content and is sourced from different cryptocurrency news feeds to BlockForums.

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