Ex-Employees Level Major Fraud Allegations Against Theta

Whistleblowers from inside the video-streaming blockchain project are making explosive claims. The allegations, if proven, could shake investor confidence in one of the sector's more prominent altcoins.

Behind the Code Curtain

The core of the accusation centers on systematic misconduct. Former team members allege practices that directly contradict the project's public-facing ethos of decentralization and transparency. Specifics remain under wraps, but the charges point toward potential financial and operational malfeasance.

Market Mechanics Under a Microscope

For a project built on trust and network participation, such claims strike at its foundation. They raise immediate questions about governance, fund allocation, and the veracity of reported milestones. The crypto market has seen this script before—a promising protocol derailed by internal contradictions.

Trust, the Ultimate Smart Contract

Technology can bypass middlemen, but it can't code out human nature. This case serves as another stark reminder: in crypto, the most critical audit isn't of the blockchain, but of the people building on top of it. After all, what's a decentralized ledger worth if the team behind it runs a centralized opaquer? The finance sector's old penchant for creative accounting evidently found its way into the new digital frontier.

For a long time, news concerning cryptocurrency related lawsuits mostly revolved around cases being dismissed or investigations concluding. However, today saw the initiation of a substantial fraud lawsuit concerning one of the popular altcoins. This case stands out due to serious allegations brought forth by former employees of the company.

Theta Coin Lawsuit

Two former employees of Theta Labs Inc. have made significant allegations in a lawsuit filed today at the California Superior Court, Los Angeles County. The accusers claim that Mitchell Liu, the CEO of Theta Labs for the past few years, has been engaging in speculation to boost the value of crypto products. To elevate his project’s visibility, Liu reportedly formed notable partnerships with major Hollywood studios and celebrities, including the likes of Katy Perry.

Such weighty accusations from former employees could lead to adverse outcomes for Theta, particularly due to the potential for more witnesses being encouraged to come forward in related cases. Although THETA has not yet experienced any major price movements, the ongoing legal proceedings could pressurize the charts.

Theta Coin Developments

Coincidentally, today the team announced the EdgeCloud upgrade for the Theta Network. This significant infrastructure update, coinciding with the lawsuit’s filing, offers Nvidia H200 GPUs at the same price as the H100. According to W1lliamLogan:

“The Theta Network’s EdgeCloud upgrade delivers 2.5 times faster AI training and inference speeds with 141 GB of VRAM. This leap enhances capacity and efficiency for developers and businesses benefiting from the platform. With support from enterprise validators like Sony Europe, Theta continues to advance decentralized video streaming and edge computing infrastructure.”

Thus, December 16 presents both good and bad news for Theta. Analyzing the chart reveals that the price remained nearly flat throughout the day above the $0.317 support level.

In March and December of 2024, Theta Coin marked lower peaks and could not establish continuity above $1.03 throughout 2025. Even surpassing the previous year’s peaks above $3 has been an elusive goal for the altcoin, which dipped to $0.2 during the October 10 downturn. Such levels were last witnessed in September 2020.

Should the lawsuit begin to adversely affect the chart or if selling across the market accelerates, a test of the 2020 support level at $0.118 could be possible.