The District Court of East Brabant in the city of ‘s-Hertogenbosch, Netherlands has set the date for a joint hearing of cases 407588 EX RK 24-127 and 407808 EX RK 24-131 concerning the proposed dismissal of current directors of Syscoin Foundation and installation of a court-appointed Director to investigate fraud, embezzlement, document forgery, money laundering and participation in a criminal organization allegations. These allegations were initially reported by Dogecoin Foundation in a criminal complaint lodged with the Functional Public Prosecutor’s Office in the Netherlands on 26 July 2024. The court hearing is scheduled for 19 September 2024 at 10:00.
Syscoin is the world’s fifth-oldest surviving cryptocurrency. It was co-founded over 10 years ago by Sebastien DiMichele and Sebastian Schepis. It is also the world’s second-largest blockchain by hashrate power, as it has been adopted by over 70% of Bitcoin miners through an innovative process called merge-mining. Syscoin Foundation, registered in the Netherlands, is the official legal entity stewarding the development of Syscoin blockchain and representing the interests of Syscoin community of tokenholders.
Long-simmering tensions within Syscoin Foundation became public in late July 2024 when Syscoin Foundation Directors Willy Ko and Bradley Stephenson as well as its Head of Business Development Matthew Mappin went on the record to Decrypt alleging funds mismanagement of Syscoin Foundation’s treasury, which at one point contained over 100 million USD worth of assets. According to Willy Ko, Jagdeep Sidhu held sole control over the wallet with the whole treasury of Syscoin Foundation.
Angel Versetti, Authorized Representative of Dogecoin Foundation, the single largest investor in Syscoin’s cryptocurrency SYS, spoke to Jagdeep Sidhu on 25 July 2024 in a recorded conference call with multiple witnesses present. Angel Versetti commented: “Jagdeep Sidhu confirmed in that call that he indeed held sole control over Syscoin Foundation’s wallet, claiming he could not trust his own fellow Foundation Directors with funds”.
After the news of Dogecoin Foundation filing the criminal complaint in the Netherlands became known, Jagdeep Sidhu, Christopher O’Shea and Michiel Naring attempted to remove Willy Ko and Bradley Stephenson from Syscoin Foundation alleging they were preparing a “hostile takeover” and had intent to position themselves as whistleblowers. In the statement of defence Willy Ko hit back claiming “Evidence shows that foundation funds were used to support and exploit Jagdeep, Michiel, and Chris’ own for-profit company, SYS Labs.”. Sebastien DiMichele, an original Cofounder of Syscoin concurred, stating that “a non-profit foundation cannot just fund a for profit foundation, specially When members of the foundation and @SYSLabsOfficial (SYS Labs) & @RolluxL2 (Rollux) projects are all the same people.”
Dogecoin Foundation in the meantime filed a motion to dismiss Syscoin Foundation directors and to bring in a court-appointed independent director who will perform a comprehensive investigation of alleged crimes that took place at the Foundation, including initiating a thorough financial audit and seek complete recovery of any assets that were embezzled or otherwise unlawfully transferred from Syscoin Foundation by its Directors.
Angel Versetti summarized: “Syscoin Foundation was promoted to retail investors as a legitimate and compliant Dutch non-profit foundation operating under EU law. In practice, what only two and a half years ago was massive treasury of the Dutch non-profit, with over 100 million USD worth of assets, somehow ended up mostly in a for-profit company in Dubai (SYS Labs Holdings Ltd) owned and managed by the very same individuals who serve as Directors of the non-profit Syscoin Foundation. Unlike the Dutch non-profit entity, their Dubai company has no transparency obligations whatsoever, and this company made acquisitions of other projects and companies, including buying companies owned or launched by the very same Foundation directors. So, ultimately it appears that the money from non-profit foundation ended up in their pockets. Were they attempting to launder their allegedly criminally obtained money while trying to portray those acquisitions as somehow beneficial for Syscoin tokenholders? We certainly hope the courts, regulators, auditors and criminal investigations find clear answers to this burning question”.
All five directors of Syscoin Foundation and two directors of Dogecoin Foundation are parties to the upcoming public hearing and are set to appear in court on 19 September 2024.
