Ethereum development firm ConsenSys will be audited at the request of its shareholders, according to a report from Finextra on Jan. 18.
ConsenSys allegedly transferred business products and units between its Switzerland- and U.S.-based corporations in a transaction called “Project Northstar.” That transfer allowed ConsenSys’s U.S. division to raise $715 million from 2020 to 2022.
A Swiss judge has now ruled in favor of a shareholder request that will see ConsenSys undergo an audit investigating the relevant transaction.
Shareholders assert that the transaction was made in a “clandestine fashion” — that it was conducted without their knowledge or approval. ConsenSys is said to have ignored requests for clarity and illegally suspended shareholder meetings. Shareholders say they ultimately found out about the deal through public media coverage.
Supposedly, the deal was authorized by ConsenSys CEO Joseph Lubin, who at the time was the sole remaining member of the firm’s board of directors.
The shareholders responsible for initiating the procedure are a group of 35 employees who make up more than 50% of shareholders, according to early reports.
The request for an audit has been underway for some time. The shareholders responsible for the audit request originally filed their request in March 2022, and the judge in the case approved a request for a vote in December of last year.
ConsenSys is known for its numerous contributions to the Ethereum ecosystem, including the popular Ethereum wallet Metamask and the API suite Infura. Both of those products were said to be part of the transaction in question. Earlier reports suggest that the Project Northstar transaction allowed banking giant JP Morgan to gain stake in those products.
ConsenSys announced that it would lay off 11% of its workforce yesterday in a decision that is apparently unrelated to this development.