Former Staffers Allege Theta Labs Leadership Engaged in Fraudulent Practices

New legal filings throw Theta Network's corporate governance into sharp relief—and not the flattering kind.

Whistleblowers Break Ranks

According to a freshly filed lawsuit, multiple ex-employees have stepped forward with claims that executives at Theta Labs, the force behind the Theta blockchain, orchestrated fraudulent activities. The allegations paint a picture of internal misconduct that cuts directly against the project's public-facing narrative of decentralized innovation.

The Core of the Controversy

The suit details accusations that leadership bypassed standard operational protocols and engaged in deceptive practices. While the exact number of plaintiffs remains undisclosed, the complaint suggests a pattern of behavior rather than an isolated incident—a detail that could amplify the legal and reputational fallout.

Market Mechanics vs. Management

This isn't just a personnel dispute; it's a stress test for the token's credibility. Theta, which powers a decentralized video delivery network, now faces a classic crypto quandary: can the technology's promise survive the alleged human failures at its core? It's a stark reminder that in Web3, the code might be open-source, but the boardroom doors often aren't. (Another case of 'decentralize everything except the liability,' as the old finance cynics would say.)

The case proceeds, leaving the community to watch whether the network's resilience extends to its corporate shell.

Recent news related to lawsuits in the cryptocurrency sector often conclude with “case dismissed, investigation closed.” However, today saw the filing of a new fraud lawsuit involving one of the prominent altcoins. Significantly, the lawsuit was filed by former employees of the company, making serious allegations against it.

Theta Coin Lawsuit

Two former employees of THETA Labs Inc. have brought forth significant allegations in a case filed today in the California Superior Court, Los Angeles County. According to them, Mitchell Liu, the CEO of Theta Labs for the past few years, is accused of market manipulation aimed at increasing the value of cryptocurrency products. As part of his strategy to boost project visibility, Liu had engaged in major collaborations with large Hollywood studios and celebrities, including Katy Perry.

The severity of these allegations, being raised by former insiders, may bode ill for Theta, as it increases the potential for more witnesses in the case. Although Theta has not experienced severe price fluctuations yet, the unfolding legal proceedings might start exerting downward pressure on its value trajectory.

Theta Coin Developments

Coincidentally, on the same day as the lawsuit filing, the team announced the EdgeCloud upgrade for Theta Network. This major infrastructure upgrade aligns with new Nvidia H200 GPUs offered at the same price as H100. W1lliamLogan stated:

“The EdgeCloud upgrade delivers AI training and inference speeds 2.5 times faster with 141 GB VRAM. This breakthrough enhances capacity and efficiency for developers and businesses utilizing the platform. Supported by corporate validators like Sony Europe, Theta continues to enhance decentralized video streaming and edge computing infrastructure.”

Therefore, December 16 brought mixed news for Theta. The price remained almost unchanged throughout the day, staying above the $0.317 support.

Theta Coin witnessed lower peaks in March and December 2024, failing to sustain above $1.03 throughout 2025. Struggling to ascend past its peaks of $3 from last year, the altcoin saw lows of $0.2 in the October 10 decline, a level last seen in September 2020.

Should the lawsuit adversely affect its chart, or if general market sell-offs intensify, it might test the next support from 2020 at $0.118.