Former Theta Labs Employees Blow Whistle on Controversial Practices

Insiders break their silence—and the story isn't pretty.

What happens when the people who built the machine decide to speak out? A wave of allegations has surfaced from former Theta Labs employees, painting a picture of internal practices that clash with the project's public-facing vision. The revelations cut to the core of operational transparency and corporate governance in the high-stakes crypto arena.

The Whistleblower's Ledger

Sources describe a culture where aggressive milestones sometimes bypassed thorough diligence. They point to strategic decisions that prioritized market momentum over foundational stability—a classic case of building the plane while flying it, but with investor funds as the primary fuel. The narrative suggests a disconnect between the engineering grind and the executive suite's roadmap.

Decentralization's Corporate Shadow

Here's the rub for any Web3 project: how do you champion a decentralized future while running a tightly controlled corporate ship? The allegations hint at this inherent tension. Promises of community-driven governance can ring hollow when key technical and treasury decisions remain shrouded, managed more like a traditional startup's cap table than a public protocol's treasury—another reminder that in crypto, the 'decentralized' part is often more marketing than mechanics.

Fallout and the Road Ahead

Trust, once fractured, is a brutal asset to reclaim. The market's reaction will be the ultimate auditor, scrutinizing Theta's tokenomics and community engagement with renewed skepticism. For the broader sector, it's a stark lesson: your employees aren't just human resources; they're potential future witnesses. Every project's greatest vulnerability might just be the people who used to have the admin keys.

In the end, the crypto industry loves a comeback story almost as much as it loves a scandal. Whether Theta Labs navigates this into a tale of reform or a cautionary footnote depends entirely on what they do next—transparency, for once, wouldn't be a buzzword, but a necessity. After all, nothing boosts confidence like watching a team fix its leaks in real-time, especially when the entire ship is built on speculative trust.

For a long time, news about cryptocurrency lawsuits has revolved around themes like “case dismissed” or “investigation concluded.” However, a new fraud case opened today concerning one of the prominent altcoins marks a shift. This lawsuit is particularly significant because it has been initiated by former employees of the company, bringing forward considerable allegations.

Theta Coin Lawsuit

Two former employees of THETA Labs Inc. have made significant allegations in a lawsuit filed today in the California Superior Court, Los Angeles County. According to the claims, Mitchell Liu, who has been the CEO of Theta Labs for the past few years, has been engaging in speculation to increase the value of cryptocurrency products. Liu had also formed substantial partnerships with major Hollywood studios and celebrities, including Katy Perry, to boost the visibility of his project.

The serious nature of these allegations, coming from former employees, might not bode well for Theta due to their potential to attract additional witnesses. Although Theta is currently not experiencing significant price movements, the ongoing proceedings could pressure the charts if the allegations persist.

Theta Coin

Today, the team announced the EdgeCloud upgrade for the Theta Network. Coinciding with the lawsuit filing, this major infrastructure upgrade offers Nvidia H200 GPUs at the same price as H100. W1lliamLogan stated:

“The EdgeCloud upgrade by Theta Network provides 2.5 times faster AI training and inference speeds with 141 GB VRAM. This leap enhances capacity and efficiency for businesses and developers leveraging the platform, with continued support from institutional validators like Sony Europe to advance decentralized video streaming and edge computing infrastructure.”

Thus, December 16 brought both good and bad news for Theta. Observing the chart, the price remained nearly stable above the $0.317 support throughout the day.

In March and December of 2024, Theta Coin reached lower peaks yet failed to sustain above $1.03 throughout 2025. Even last year’s peaks above $3 proved elusive as the altcoin plunged to $0.2 during the October 10 drop, a level last seen in September 2020.

Should the lawsuit begin to negatively impact the chart or if broader market sell-offs accelerate, Theta might test the next support of $0.118, reminiscent of the 2020 period.