On Monday, AVAX, the native token of Avalanche blockchain, fell to its lowest since July 13 after Crypto Leaks, a self-proclaimed whistleblower, accused Ava Labs of paying attorneys to keep regulators at bay and inflict damage on the competition. Ava Labs is the company behind Avalanche.
Ava Labsโ clandestine deal with Roche Freedman
According to a report, Ava Labs and law firm Roche Freedman reached an agreement, under which the firm would collect classified information of rival companies and file class action lawsuits in exchange for huge volumes of AVAX tokens and stocks in Ava Labs.
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The report stated, “We can reveal that the pact directs Roche Freedman and their leader Kyle Roche, to use the American legal system – gangster style – to attack and harm crypto organizations and projects that might compete with Ava Labs or Avalanche in some way and sue crypto industry actors with the aim of creating magnets for regulators such as the SEC and CFTC that distract them from the highly commercial nature of Ava Labs and the Avalanche blockchain.”
AVAX down 18% in a week
AVAX slid to 16th position by market cap, losing 10% in the past 24 hours and more than 18% in the past seven days, CoinMarketCap data shows.
AVAX was the only cryptocurrency on Monday with a market cap of at least $1 billion to record a double-digit percentage loss in 24 hours. Other major cryptos only lost up to 5% today.
Investors: This is โdisturbingโ
Ava Labs CEO and founder Emin Gรผn Sirer called the report โconspiracy theory nonsense,โ but it attracted the attention of major industry players.
Some leading investors called it โdisturbing,โ while others wondered whether both Ava Labs and Roche Freedman will draw the ire of legislators for their questionable business deal.
CZ: The report is โwildโ
Binance founder and CEO Changpeng Zhao tweeted that the report was โwild.โ The tweet has been deleted, but it assumes the evidence provided by the whistleblower is legitimate. According to CZ, the target was Binance, although the centralized exchange is not Avalancheโs direct competitor.
Last year, Avalanche became wildly popular along with a few other blockchains alternative to the Ethereum Mainnet due to the latterโs excessive transaction costs. AVAX gained more than 3,000% last year, hitting an all-time high above $140.
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