The bail out of cash-strapped Swiss blockchain payments firm Monetas has been terminated by would-be investor Artillery One, swissinfo.ch can reveal. The United States investment vehicle is also suing Monetas founder Johann Gevers for alleged breach of contract and “intentional misrepresentation”.
In late January, Artillery One stepped in to take a controlling stake in the embattled Monetas. Now, a letter from lawyers representing Artillery One, seen by swissinfo.ch, alleges that Gevers failed to transfer his majority stake despite payment being made for the shares. Artillery One has demanded a full refund, plus damages and CHF1 million ($1.06 million) in incurred costs from the failed deal.
“Artillery One hereby gives you notice that it is terminating the transaction and demands repayment of any and all consideration paid by Artillery One, whether to or for the benefit of you, Monetas, creditors, attorneys and other professionals, and indemnity and further damages as a result of these breaches and failures,” reads a letter sent from Los Angeles law firm Thompson Coburn to Gevers on February 27.
“Artillery One further gives notice that it intends to pursue claims against you and Monetas arising from this transaction, including without limitation for breach of contract, warranty and intentional misrepresentation, among other claims,” it continues. This includes a CHF1 million claim for “expenditures and losses”.
Speaking to swissinfo.ch, Gevers denied all the allegations made against him, and instead blamed Artillery One for the turn of events. He claimed he was not paid the full amount for his Monetas shares, which is why they were not transferred.
In a note sent to Monetas investors, Gevers says that Artillery One had agreed to pay CHF2 million for 50.01% of shares in the company's Anguilla-based parent company, but claims only CHF400,000 had been delivered when the deal turned sour. The note accuses Cannon of "willful misrepresentations".
"This is fresh news, so I need to digest it and sit with advisors and key investors to chart the best way forward," the note adds.
The collapse of the deal is a significant blow for Monetas, which was placed in involuntary bankruptcy by a Zug court in December. That process was lifted last month when Artillery One, founded by US investor Daniel Cannon, agreed to buy a majority stake from Gevers.
The rescue deal was signed and sealed on January 30, but Artillery One complains that Gevers has failed to live up to his side of the bargain. This includes a failure to give details of debts owed to Monetas creditors or to hand over the shares that were bought, according to the letter.
The letter also demands that Gevers clarify an alleged comment made to Cannon that Monetas has apparently been threatened with bankruptcy yet again.
The legal claim caps a miserable few months for Gevers, who has both seen his start-up flounder and has stepped down from the unrelated Tezos Foundation following an bitter row over governance.
Daniel Cannon declined to comment to swissinfo.ch.