Theta Coin Rocked by Fraud Allegations as Ex-Employees Break Silence

Insiders turn whistleblowers, alleging misconduct at the video streaming blockchain project.

The Accusations Surface

Former staff members have come forward with claims of deceptive practices, sending shockwaves through Theta's community and raising urgent questions about governance. The allegations suggest a pattern of behavior that contradicts the project's public-facing narrative of decentralization and transparency.

Market Reaction and Investor Sentiment

Such news typically triggers volatility, testing the conviction of long-term holders. While the core technology—a decentralized network for video delivery—remains theoretically sound, trust is the non-negotiable asset in crypto. When it erodes, the price often follows, regardless of the whitepaper's promises.

A Sector-Wide Reckoning

This isn't an isolated incident. Theta's situation echoes a familiar tune in the altcoin arena, where ambitious roadmaps can sometimes precede operational rigor. It serves as a stark reminder for due diligence—because in crypto, sometimes the most innovative thing about a project is its accounting.

The path forward hinges on transparent, third-party verification of the claims. Until then, the market holds its breath, a familiar posture for an industry that treats scandal as a recurring line item.

For a long time, news regarding lawsuits involving cryptocurrencies typically ended with cases being dropped or investigations concluded. However, today a new fraud lawsuit has been filed involving one of the prominent altcoins. This case is particularly significant, as it originates from serious allegations made by the company’s former employees.

Theta Coin Lawsuit

Two former employees of THETA Labs Inc. have brought forward major claims in a lawsuit filed today in the California Superior Court, Los Angeles County. They allege that Mitchell Liu, who has been the CEO of Theta Labs in recent years, has been involved in manipulating the value of cryptographic products to enhance profitability. To increase the project’s visibility, Liu has engaged in substantial collaborations with major Hollywood studios and celebrities, including Katy Perry.

The fact that such serious allegations have been made by former employees could have negative implications for Theta due to the potential for more witnesses to come forward in support of the legal proceedings. While Theta has not yet experienced significant price movement, these allegations could exert downward pressure on its market value as the situation develops.

Theta Coin Developments

Today, coinciding with the lawsuit’s announcement, the team revealed the Theta Network’s EdgeCloud upgrade. The significant infrastructure upgrade provides Nvidia H200 GPUs priced similarly to H100. W1lliamLogan explained:

“The Theta Network’s EdgeCloud upgrade offers AI training and inference speeds that are 2.5 times faster with 141 GB VRAM. This innovation enhances capacity and efficiency for developers and businesses utilizing the platform. With support from institutional validators such as Sony Europe, Theta continues to advance decentralized video streaming and edge computing infrastructure.”

Thus, December 16 brings both good and bad news for Theta. Analyzing the charts, the price remained almost unchanged throughout the day above the $0.317 support.

Theta Coin, which hit lower peaks in March and December 2024, failed to maintain its value above $1.03 throughout 2025. It could not surpass last year’s peaks above $3, briefly reaching $0.2 during the downturn on October 10. It last hovered around such levels back in September 2020.

If the lawsuit starts to negatively impact the charts or if general market sell-offs accelerate, the next support level at $0.118 from 2020 may be tested.