Dispute escalates publicly: IOTA co-founder demands 25 million MIOTA

  • A public dispute has broken out between IOTA co-founders David Sønstebø and Sergey Ivancheglo just one day before a public statement in which “all questions about JINN will be answered”.
  • Because of alleged embezzlement, Ivancheglo is demanding 25,000,000 MIOTA, currently worth around 7.7 million US dollars, from Sønstebø.

In the middle of last week IOTA co-founder David Sønstebø made the announcement via Discord that today, Monday, all questions related to the secret project JINN will be answered. JINN is a revolutionary microprocessor based on trinary calculation methods, which could be the breakthrough for IOTA as a base layer for machine economics. The intellectual father of the project is Sergey Ivancheglo, a former co-founder of IOTA, also known by the pseudonym Come-from-Beyond (CfB).

However, it seems that there is quite a dispute between these two IOTA co-founders, which has escalated, as can be seen from various Twitter postings. Disputes among the IOTA co-founders and around Ivancheglo have already occurred in the past. Last year Ivancheglo expressed his distrust towards another IOTA co-founder, Dominik Schiener, and demanded his resignation from the IOTA Foundation.

The dispute culminated in Ivancheglo announcing his resignation from the IOTA Foundation. As a reason Ivancheglo mentioned possible conflicts of interest with his current business. However, he also confirmed that he would continue to work on Qubic and Aigarth. Qubic is a quorum-based calculation protocol that IOTA uses to integrate Oracle and Smart Contracts into the IOTA protocol. Aigarth is an AI software based on it.

Sønstebø was regarded as one of the supporters of Ivancheglo during the dispute at that time and acted as mediator between the parties to the dispute. In a blog post Sønstebø wrote at that time:

Although I don’t always agree or approve of CFB’s unorthodox actions as it pertains to communication, I fully trust him as my co-founder and nothing has changed in terms of the development of the big picture.

Ivancheglo, after leaving the IOTA Foundation, sold his IOTA to found Paracosm, a company that develops a gaming ecosystem based on the IOTA Tangle technology.

Ivancheglo demands 25 million IOTA from Sønstebø

As was made public yesterday via Twitter, Ivancheglo is threatening legal action against his former friend and co-founder David Sønstebø in the new dispute. It appears to be about embezzlement, in the context of which Ivancheglo is demanding 25,000,000 MIOTA, currently worth around 7.7 million US dollars. He wrote:

I notify the #IOTA community that I no longer work with David Sønstebø and am contacting my lawyers to get my 25 Ti from him. He refuses to transfer the iotas to make me act for his own benefit and against mine.

Sønstebø reacted with numerous very detailed and emotional messages via Discord. Among other things he wrote:

Don’t worry. I have kept CFB in a position of power due to my prior respect for him, he burned that bridge permanently today and his role in IOTA is now non-existent. He made it clear long ago that he only cares about his own private, nascent MMO-VR company and wanted all of IOTA to conform to that, without contributing to IOTA himself.

While this is not a day of celebration for me personally, it ought be one for the IOTA project and the IOTA movement. It is now entirely free to act purely based on what is best for the vision.

As can only be guessed at so far, the dispute seems to be about Ivancheglo’s gaming project Paracosm on the one hand, and the question of funding for JINN Labs, which both parties to the dispute founded in 2014, on the other. Coincidentally, the time of the dispute is only one day before Sønstebø wants to answer questions about the secret project.

In another message via Discord, Sønstebø stated that Ivancheglo had failed to comply with a “last minute” agreement and violated his obligations to IOTA. A detailed explanation, accepted by both, is due to appear today, as Sønstebø reaffirmed yesterday. The implications for JINN are unclear at this time. In this respect the official announcement remains to be seen.

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About Author

Jake Simmons

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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