Ethereum's ConsenSys Faces Audit Over Financial Irregularities
![](https://en.ethereumworldnews.com/wp-content/uploads/2022/03/B6BD294B-AE0A-4844-940F-8CB9AD66C2E9-50x50.jpeg"></p><p>Quick take:</p><ul><li>ConsenSys is facing a multi-billion audit as a result of 35 shareholders filing a request with Swiss Courts to investigate irregular financial transactions</li><li>The transactions involve the transfer of intellectual properties and subsidiaries from ConsynSys AG to ConsenSys Software Incorporated (CSI) without the knowledge of the 35 shareholders</li><li>Joseph Lubin is a major shareholder at both companies</li></ul><div class=)
The Ethereum software development firm of ConsenSys is facing a -multi-billion audit aimed at investigating financial irregularities at the company.
On March 1st, 2022, thirty-five former employees filed ‘a request for a special audit pursuant to art. 697a et seq. of the Swiss Code of Obligations’. The employees represent more than 50% of known ConsenSys AG shareholders who want a special audit performed to investigate serious financial irregularities at the company.
The irregularities were reportedly committed on August 14th, 2020, when fundamental intellectual property and subsidiaries were transferred from ConsynSys AG into a new entity known as ConsenSys Software Incorporated (CSI). The transaction was made in exchange for 10% ownership of CSI and $39 million to offset a loan by the founder of ConsenSys, Joseph Lubin.
Joseph Lubin and Frithjof Weinert acted as directors at both ConsenSys AG and CSI during the transaction. Consequently, the transfer was assets was illegal under Swiss law, thus the need for an audit and special investigations in the United States.
Additionally, minority shareholders of ConsenSys AG had no knowledge of the transactions at the time.
Furthermore, the company’s annual shareholder meetings were illegally delayed after 2018. As a result, Frithjof Weinert remained a member of the board of directors and faces another accusation of not being a validly elected director to authorize the aforementioned transfer of assets.
The assets transferred include the ConsenSys products of Infura, MetaMask, Truffle, PegaSys, and Codefi. They also included subsidiaries in France, the UK, Ireland, Australia, and Hong Kong. All these assets were valued at $46.6 million as of June 30th, 2020.
The request for an audit will be reviewed by The Swiss Court over the next few months. The courts will then conclude whether further investigations need to be carried out.
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