Layer1 CEO alleges co-founder is using majority power to ‘ransack’ company

The CEO of cryptominer Layer1 Technologies has filed a lawsuit against the other two members of the company's board of directors, including co-founder Jakov Dolic, for allegedly seizing Layer1's operations for his own gain.

Chief Executive John Harney and DGF Investments Inc, an investment firm based in the British Virgin Islands, archived the lawsuit against Dolic and board member Tobias Ebel in the Delaware Court of Chancery on February 2.

The lawsuit alleges that both Dolic and Ebel used a power vacuum at Enigma, Layer1's parent company, to seize control of the Bitcoin mining company and operate it as their "own personal fiefdom."

Harney and DGF Investments Inc, which owns a majority stake in Enigma, claim the defendants "usurped the authority" of Layer1's CEO and prevented Harney from "operating Layer1 responsibly."

One of the accusations leveled against Dolic and Ebel alleges that they executed "large unauthorized transactions" that were not recorded in Layer1's financial reports and that they use Layer1's data. Bitcoin mining operations (BTC) and keep the proceeds for themselves:

"Dolic and his loyalists" have "exerted their majority control of the board to plunder Layer1, operating it for their own profit and engaging in self-contracting transactions with impunity."

The plaintiffs also claimed that Dolic continues to push the false narrative that he owns 77% of Layer1's capital. In the filing, the plaintiffs argued that Dolic sold all of its Layer1 shares to Enigma for $16 million on January 24, 2022.

Harney and DGF have stressed that without imminent court intervention to confirm that Enigma has 100% ownership of Layer1, there is nothing that can stop Dolic and Ebel from "operating" the company "for their own benefit".

Related: Argo Blockchain Accused of Misleading Investors in Class Action Lawsuit

The latest lawsuit filed against Dolic and Ebel alleges a breach of fiduciary duty, pursuant to section 226 of the Delaware General Corporation Law.

The Plaintiffs hope to get relief from the court through an injunction, have the defendants pay their fees, and order a designated custodian to run the business.

Layer1 Technologies was the first US-based Bitcoin mining company to fully integrate renewable energy into its operations. according to a 2020 report.

Cointelegraph reached out to Dolic for comment but did not receive an immediate response.