Investors Fight Dismissal of Round Finance Asset Diversion Lawsuit
On Monday, June 9, 2025, Dean Soteropoulos and Prem Tadipatri filed a brief in the US District Court for the District of Delaware in response to a motion by defendants Round Finance Inc., Anshum Bhambri, Kushagra Kohli, Vishal Vasudeva, FanCraze Technologies Inc., and Sundar Raman to dismiss their amended complaint. The case involves allegations of breached fiduciary duties and asset diversion, with the plaintiffs seeking a jury trial.
The plaintiffs, who each invested $50,000 in Round Finance through Simple Agreements for Future Tokens or Equity (SAFTEs) in 2019 and 2020, claim that the defendants improperly transferred Round’s assets and business opportunities to FanCraze Technologies, a competing company founded by Bhambri in May 2021.
According to the brief, Round was developing products such as NFT cricket cards, a digital wallet, and blockchain gaming platforms, which were later pursued by FanCraze. The plaintiffs allege that FanCraze secured a three-year deal with the International Cricket Council for cricket NFTs, a product originally developed by Round, while Round was abandoned and ceased operations.
The brief argues that SAFTE holders, like the plaintiffs, are owed fiduciary duties, asserting that these agreements are equity securities. It cites Y Combinator, the creator of SAFTEs, which classifies them as equity, and notes that the plaintiffs’ SAFTEs granted dividend rights, a traditional shareholder privilege. The plaintiffs challenge the defendants’ reliance on case law, such as Simons v. Cogan, which treated convertible debentures as debt, arguing that SAFTEs differ because they lack debt-like features and involve no unilateral conversion rights. The brief also references a New York case, Levinson v. Twiage, where a court upheld fiduciary duties for SAFE holders.
Additionally, the plaintiffs contend that making a pre-suit demand on Round’s board would have been futile. They allege Bhambri, as CEO and director of both Round and FanCraze, received personal benefits from diverting Round’s assets, including employees and intellectual property, to FanCraze, which raised over $117 million while Round received no further funding. The brief details specific instances, such as Vasudeva’s transfer from Round to FanCraze as Vice President of Products, and claims that other defendants, including Kohli and Raman, also benefited from the misconduct or lacked independence from Bhambri.
The amended complaint includes counts of breach of fiduciary duty, unjust enrichment, and fraud, alleging that the defendants failed to disclose material facts about asset transfers and misrepresented their commitment to Round’s success. The plaintiffs assert that Round’s board ignored their concerns raised prior to the lawsuit, particularly regarding self-dealing transactions involving FanCraze.
The brief urges the court to deny the defendants’ motion to dismiss, arguing that dismissing the case could set a precedent allowing SAFTEs to be used as vehicles for fraud without investor recourse. If the court finds the allegations insufficiently specific, the plaintiffs request permission to file a second amended complaint to provide further details.
Please contact BlockTribune for access to a copy of this filing.
