Entrepreneurship

Stake.com founders hit with $580 million lawsuit

Freeman claims he initially held a 20 per cent stake in Primedice while Tehrani and Craven both held 40 per cent, an arrangement that reflected their initial investment in the business.

Freeman alleges that within nine months of the establishment of Primedice, his shareholding was reduced to 14 per cent to reward other senior members of the development team.

Freeman alleges this share transfer occurred despite the trio having an agreement that Primedice would only provide equity to people who had put money into the business.

As cryptocurrency took off, Freeman alleges he raised the idea of a cryptocurrency casino with his business partners in 2016, but Tehrani and Craven were not interested in his idea given the potential issues with regulation.

That same year, Freeman alleges he was dissuaded from joining Tehrani and Craven’s new business venture, allegedly Stake.com, after being told he could only participate if he moved to Australia and that the new venture would only deal in fiat currencies such as the US dollar or the Euro.

“Freeman, who was committed to and comfortable with online gambling concepts, believed a fiat money casino was the wrong direction to go (online gaming facilitated by fiat is a widespread, big business),” court documents allege.

“He reasoned it was highly competitive and presented personal risks which he was not prepared to accept, and he did not want to be forced to move to Australia to pursue a fiat-based gambling business”.

Freeman alleges that despite their previous statements about a cryptocurrency casino being too expensive to run and concerns about regulation, Tehrani and Craven launched their cryptocurrency casino Stake.com.

He also alleges that when he questioned Tehrani and Craven, he was given assurances by the pair before having his system privileges revoked.

“Later, when Stake.com launched as a virtual casino which included a competing online dice game and many other features Freeman had proposed and helped design, Tehrani and Craven affirmatively tried to assuage Freeman’s dismay at having been misled by affirming that he still retained his stake in Primedice.”

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“Eventually, Freeman’s access to the Primedice account was blocked and never returned.”

Freeman’s lawyers did not respond to requests for comment.

Stake.com said in a statement: “The complaint filed by Chris Freeman contains allegations that are internally inconsistent, intentionally misleading, and provably false.” The company described the claim as a “desperate attempt to spread false information”, adding Freeman had no claim to the money he said he was owed.

It added the founders of the company do not intend to cave to Freeman’s demands “and are confident that these utterly frivolous allegations will be dismissed by the court in due course.”

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