A high-flying cryptocurrency startup that's just eight months old is already enmeshed in a legal dispute with a high-profile investor.
Shari Glazer, a Los Angeles entrepreneur whose family owns the Tampa Bay Buccaneers National Football League team has sued Mo Shaikh, the CEO of Aptos Labs Inc., a billion-dollar company Shaikh helped launch after leaving Meta Platforms Inc.'s aborted digital currency effort last year. Claiming in her suit that the company was born out of a consulting arrangement for which she had hired Shaikh, Glazer is seeking at least $1 billion in damages and the court's declaration that she owns 50% of the company.
"This action arises out of a fraudulent scheme by Mohammad Shaikh to deprive Ms. Glazer of her rightful share of a partnership in a blockchain technology venture," Glazer said in her suit, filed in March.
For his part, Shaikh has denied that there was any agreement between the two of them. The disagreement stemmed from Glazer being unhappy that a prospective $10 million investment in Aptos would give her only a 1% stake in the company, he said in a response filed in May.
"The Complaint in this case is a work of fiction," Shaikh said in his response.
Representatives for Glazer did not respond to a request for comment by the Business Journals. Representatives for Aptos were not immediately available for comment.
Aptos leapt into the spotlight in mid-March when it announced it had raised $200 million at a valuation of more than $1 billion four months after it was founded. Filed two weeks before that funding announcement, Glazer's lawsuit had gone largely unnoticed until Fortune magazine mentioned it this week in a profile of the startup.
When it announced its funding in March, Aptos identified Shaikh and Chief Technology Officer Avery Chang as its co-founders. It didn't mention Glazer or her claims.
Shaikh and Chang said then they left Meta because it wasn't making progress on its cryptocurrency project, which they both worked on. Aptos Labs is building its own blockchain that's designed to improve on Meta's effort, making it more secure, fast and scalable.
In her suit, Glazer laid out a different account of Aptos' founding. According to her complaint, Glazer hired Shaikh as a consultant for Swoon Capital, her investment firm, in August 2021, to find blockchains she and her firm could buy. Shaikh later proposed assembling a team to develop a blockchain for Swoon instead, according to Glazer's suit. Glazer pledged $10 million for that project, which became known as Matonee, with a condition that Shaikh couldn't take funding from venture firms that would dilute her ownership, she said in her suit.
In his response, Shaikh denied any such arrangement. Instead, he and the company offered to allow Glazer to make a $10 million investment as part of the $200 million round it raised this spring, he said in his court filing. Glazer refused to participate, because she would end up with only a small stake in the company, he said in his response.
In subsequent court filings, attorneys for Glazer and Shaikh have traded accusations of lying and fraud.
