NFT Wallet Company Claims Former Executives Swiped Trade Secrets

May 17, 2020, NFT wallet company Banq Inc. filed a trade secret suit in Nevada federal court against three former executives.  Banq claims the former executives stole confidential company information before leaving Banq to form two rival NFT platforms, Fortress NFT Group Inc. and Planet NFT Inc.

The mobile application Banq is a wallet that allows users to store and transfer NFTs. The lawsuit names the former CEO, Scott Purcell, CTO, Kevin Lehtiniitty, and CCO, George Georgiades, all of whom resigned in October and December, as well as Fortress NFT Group Inc. and Planet NFT Inc., the two companies they founded.

Banq accuses the executives of colluding to steal Banq’s corporate assets and technology, alleging that “on their way out of Banq, and to cover-up their wrongdoing, the defendant individuals deleted Banq’s electronic files and records, and walked out the door with company laptops, computer equipment, source code, data, and files, leaving almost no property of any significant value behind.”

CEO Scott Purcell is also accused of poaching Banq employees before his departure.  Banq asserted that “Defendant Purcell had improperly poached all of Banq’s employees who worked on sales, customer service, marketing, engineering, and accounting functions to work for Defendants Fortress NFT or Planet NFT.”  Banq seeks approximately $40 million in damages, attorney fees and enhanced damages for the allegedly “willful and malicious” misconduct.

It will be interesting to track the Banq litigation.  Typically, a company will file suit, seek preliminary relief, and then quickly settle the case to avoid costly expedited discovery and litigation that is unlikely to be covered by insurance.  Here, given the nature of the allegations – involving almost all of the company’s executives, a large number of employees and most of the company’s trade secret assets – this case may turn into a hard-fought and lengthy litigation over those assets.  We will monitor the litigation and report any significant developments.