Theta Labs Under Fire: Former Employees Allege Fraud in Explosive Accusations

Whistleblowers from inside Theta Labs' former ranks are lobbing serious fraud allegations—rocking confidence in the video streaming blockchain project just as the sector heats up.

The Core Claims

Insiders point to manipulated metrics and overstated technological capabilities. They suggest user growth and network engagement figures might not reflect reality, a classic move in the crypto hype cycle where perception often outpaces the product.

Market Reaction & Theta's Position

Predictably, the token price took a hit on the news. Theta Labs has issued a firm denial, calling the claims baseless and driven by disgruntled former personnel. They're promising transparency, but the damage to investor trust might already be done—proving once again that in crypto, sometimes the most compelling narrative isn't the one on the roadmap.

Why This Matters for Crypto

This isn't just about one project. It's a stress test for accountability in a decentralized world. As regulatory scrutiny intensifies globally, allegations like these give ammunition to skeptics who see the entire space as a high-tech Wild West. For every genuine builder, there's a finance bro waiting to pump the story and dump the bag.

The fallout continues, leaving the community to sift through the claims. One thing's clear: in the race for blockchain dominance, sometimes the biggest obstacles come from within.

For a long time, news concerning lawsuits related to cryptocurrencies revolved around themes like “lawsuit dropped” or “investigation ended.” However, today marks the initiation of a new fraud lawsuit concerning one of the prominent altcoins. This lawsuit is particularly significant as it involves serious allegations made directly by the company’s former employees.

Theta Coin Lawsuit

Two former employees of Theta Labs Inc. have put forth serious allegations in a lawsuit filed at the Los Angeles County of the California Superior Court. According to their account, Mitchell Liu, CEO of Theta Labs, has been engaging in speculative practices to increase the value of crypto products in recent years. Liu went as far as collaborating with major Hollywood studios and celebrities, including Katy Perry, to boost the visibility of his project.

The emergence of such weighty accusations by former employees raises the possibility of locating additional witnesses, potentially leading to adverse outcomes for Theta. While THETA has not yet experienced significant price fluctuations, the accusations may eventually exert downward pressure on its market value.

Theta Coin’s Future Prospects

On the same day that the lawsuit was filed, the team announced the EdgeCloud upgrade for the Theta Network. The major infrastructure upgrade coincided with the announcement, offering Nvidia H200 GPUs at the price of H100. W1lliamLogan commented on the development:

“The upgrade to Theta Network’s EdgeCloud provides AI training and inference speeds 2.5 times faster with 141 GB VRAM. This advancement increases capacity and efficiency for developers and businesses using the platform. With the support of corporate validators like Sony Europe, Theta continues to enhance its decentralized video streaming and edge computing infrastructure.”

Thus, December 16 brings both good and bad news for Theta. The price remained stable above the $0.317 support level throughout the day.

In March and December of 2024, Theta Coin experienced lower peaks and failed to sustain above $1.03 throughout 2025. The altcoin could not surpass its peaks over $3 from the previous year, plunging to $0.2 during the October 10 drop. It was last at these levels in September 2020.

If the lawsuit begins to impact market performance negatively or if market-wide selling accelerates, Theta could test its next support level at $0.118 set in 2020.