Investors Accuse NFT Founder of Stealing Millions from Bitcoin Project

Multiple investors in the Hashling NFT project have accused its founder of unlawfully diverting millions of dollars in profits from the venture and an associated Bitcoin mining operation.
In a court filing dated May 14 in Illinois, the plaintiffs allege that their former partner, Jonathan Mills, misleadingly claimed to have transferred assets from Hashling NFT, including at least $3 million from the Bitcoin mining endeavor, to a holding company, Satoshi Labs LLC (previously known as Proof of Work Labs LLC), which Mills founded and leads as CEO.
The plaintiffs have filed a lawsuit against Mills for fraud and breach of fiduciary duty, asserting that they have not received any of the expected equity returns that he promised.
They also assert that they collectively raised around $1.46 million from two NFT drops on the Solana and Bitcoin blockchains, yet received no returns on their investment.
Excerpt of the plaintiffs’ claims made against Joshua Mills in an Illinois district court. Source: PACER
The plaintiffs claim that Mills began to avoid communication shortly thereafter and created a flawed shareholder agreement to falsely support his assertion that the holding company controlled the project’s assets.
This agreement was described by the plaintiffs as “rife with errors,” aimed at bolstering his deception.
The allegedly flawed agreement detailed that Mills was to receive a 67% equity stake in Proof of Work Labs (before it was renamed to Satoshi Labs), while several other investors contributed up to $20,000 each for only a 2% equity stake.
Mills reportedly assured them that their equity stakes would not change despite the name alteration.
He also held a 67% voting power over all matters regarding Proof of Work Labs, while no other partner possessed more than a 2% stake.
Cointelegraph reached out to Mills but did not receive an immediate response.
Mills reportedly lacked NFT knowledge
The Hashling NFT project originated from an idea Mills discussed with one of the plaintiffs, Dustin Steerman, who had previously built a rapport with him through earlier collaborations.
Although Mills initially stated he had no funds and no NFT experience, the project proceeded.
Related: Bitcoin NFTs surpass Ronin in all-time sales
“[Mills] was willing to help advance the project and initially had an idea,” said attorney Clinton Ind of Ind Legal Group LLC, representing the investors, to Law360. “Though that wasn’t the final concept, it did inspire it, and everyone enjoyed working together during those early stages.”
To ensure the success of the Hashling NFT project, Mills and Steerman brought in additional investors, now also plaintiffs, to assist with various aspects, including NFT art, social media marketing, and attending NFT conferences in New York.
Mills even enlisted his girlfriend to invest in the Hashling NFTs project, as claimed by the plaintiffs.
Aside from pursuing fraud and breach of fiduciary duty claims, the plaintiffs have also requested a constructive trust over the project’s assets and full legal restitution.
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