Theta Coin Hit with Major Lawsuit: Serious Allegations Rock Crypto Project

Another day, another crypto project in the legal crosshairs.

The Core Accusation

Theta, the blockchain network focused on decentralized video delivery, now faces a formal legal challenge. The lawsuit levels serious allegations against the project's team and operations, though specific details remain under wraps. It's the classic crypto playbook: promise revolutionary tech, attract capital, then brace for regulatory scrutiny.

Market Impact & Investor Sentiment

News of legal trouble typically sends shockwaves through a token's ecosystem. For Theta holders, the immediate concern is volatility and potential value erosion. It's a stark reminder that in the digital asset wild west, groundbreaking technology and legal compliance don't always ride the same horse.

The Bigger Picture for DeFi

This lawsuit isn't happening in a vacuum. It lands as global regulators sharpen their knives for the decentralized finance sector. Each case sets a precedent, shaping the murky boundaries of what's permissible. For every genuine innovator, there's a regulator waiting to ask for the receipts—and sometimes, they can't find them.

One cynical finance jab? Nothing accelerates a 'decentralized' project's journey toward transparency like a court-ordered discovery process. Suddenly, the 'anonymous team' becomes very interested in documentation.

The case against Theta is just beginning. Its outcome could either be a minor speed bump or a fundamental threat to the project's viability. For the crypto industry watching, it's another real-time stress test on the resilience—and legitimacy—of blockchain-based ambitions.

For a long time, news about cryptocurrency lawsuits were centered around themes of “case dismissed” or “investigation ended”. However, today, one of the popular altcoins has become the subject of a new fraud lawsuit. This case involves serious allegations made directly by the company’s former employees.

Theta Coin Lawsuit Details

Two former employees of Theta Labs Inc. have brought forward significant allegations in a lawsuit filed in the California Supreme Court, Los Angeles County. According to them, Mitchell Liu, Theta Labs’ CEO for the past few years, has been engaging in speculation to increase the value of crypto products. Liu has formed significant partnerships with major Hollywood studios and celebrities, including Katy Perry, to bolster his project’s visibility.

Such severe allegations, when made by former employees, can lead to more witnesses coming forward, which might result in unfavorable outcomes for Theta. Although THETA is not experiencing any significant price movements at the moment, the ongoing proceedings could exert pressure on its price chart.

Theta Coin and Market Movements

On the same day the lawsuit was filed, the team announced the EdgeCloud upgrade for Theta Network. Remarkably, this major infrastructure upgrade offers Nvidia H200 GPUs at the same price as H100, coinciding with the legal proceedings.

“Theta Network’s EdgeCloud upgrade provides 141 GB VRAM, offering 2.5 times faster AI training and inference speeds. This breakthrough boosts capacity and efficiency for developers and businesses leveraging the platform. With support from corporate validators like Sony Europe, Theta continues to advance decentralized video streaming and edge computing infrastructure.”

Therefore, December 16th holds both good and bad news for Theta. Observing the chart, the price has stayed almost constant throughout the day above the $0.317 support level.

Throughout 2024, Theta Coin achieved lower peaks in March and December, unable to sustain above $1.03 during 2025. Even the previous year’s peaks above $3 couldn’t be surpassed, with the altcoin hitting $0.2 during the October 10th drop. These levels were last seen in September 2020.

Should the lawsuit negatively impact the chart or if overall market sell-offs accelerate, Theta might test the next support level from 2020, which is $0.118.