Australian Investor Sues Crypto Project Founder Over Rebranding Dispute

News | March 22, 2024 By:

On Friday, March 8, 2024, Paul T. Mak, a resident of Australia, filed a civil lawsuit against Theodore R. Dunham Jr. and other unnamed individuals associated with a cryptocurrency project called DePo.

According to the complaint filed in the United States District Court for the Western District of Oklahoma, Mak invested over $150,000 in the DePo project starting in 2021 after reviewing marketing materials provided by Dunham, the CEO of DePo, that touted the platform’s ability to simplify access to crypto markets. DePo planned to issue its own digital currency token called $DEPO to raise funds and reward early backers.

Mak received 49.4 million $DEPO tokens in November 2021 in return for his capital contributions to the venture. At the peak of its value in mid-January 2022, Mak’s $DEPO holdings were worth an estimated $14.2 million based on the token’s trading price against the US dollar on cryptocurrency exchanges at that time.

However, the lawsuit alleges that in early March 2022, Dunham abruptly announced DePo would undergo a “rebranding” and its tokens would be converted into a new crypto called $ARC on a 1:1 basis without notifying investors like Mak. The following day, Dunham revealed the rebranding was actually an attempt to cut off “external parties” from the project.

While most $DEPO tokens were swapped for $ARC, the complaint states Dunham failed to convert Mak’s tokens as promised. With the $DEPO market now greatly reduced, Mak was left unable to liquidate his original investment or benefit from the reorganized venture under the new brand.

The legal filing accuses Dunham of breaching his fiduciary duty to Mak as a fellow partner in the DePo joint venture. It also alleges unjust enrichment, since Dunham retained control over the funds and resources Mak contributed without properly accounting for his ownership stake in the renamed project.

Additionally, Mak asserts Dunham engaged in deceptive business practices in violation of Oklahoma’s Consumer Protection Act through misleading representations about the token swap and rebranding process. He is seeking monetary damages, disgorgement of profits, and other remedies under theories of breach of contract and illegal conduct.

With claims totaling over $75,000, the district court has jurisdiction over the interstate dispute between Mak, an international resident, and Dunham, located in Oklahoma where DePo was based. If successful, it could establish investors’ rights when crypto ventures undergo major corporate restructurings and token migrations.

PleaseĀ contact BlockTribune for access to a copy of this filing.