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In a true case for the crypto industry, Blocktrades, a leading decentralized exchange and service provider on the Hive blockchain, has won a lawsuit against Steemit Inc, the company acquired by Tron founder Justin Sun in February 2020.
The lawsuit, filed by Blocktrades in March 2020, alleged that Sun breached the terms of the Steemit Inc purchase agreement by using the company’s stake of STEEM tokens to interfere with the governance and security of the Steem blockchain. Sun was accused of orchestrating a hostile takeover of the Steem network by colluding with major exchanges to vote for his own witnesses, who control the consensus rules and validate transactions on the blockchain.
Blocktrades claimed that Sun’s actions violated the fiduciary duty of Steemit Inc to act in the best interest of the Steem community, and that Sun misappropriated the company’s assets for his own benefit. Blocktrades also argued that Sun’s takeover threatened the integrity and value of the STEEM tokens held by Blocktrades and other stakeholders.
The lawsuit sought injunctive relief to prevent Sun from further meddling with the Steem blockchain, as well as compensatory and punitive damages for the harm caused by Sun’s actions.
After a lengthy legal battle, the court ruled in favor of Blocktrades on March 15, 2023, finding that Sun breached the contract and acted in bad faith. The court ordered Sun to return the Steemit Inc stake of STEEM tokens to its original state before the takeover, and to pay $50 million in damages to Blocktrades. The court also issued a permanent injunction barring Sun from using the Steemit Inc stake to influence the Steem blockchain or its governance.
The ruling is a major victory for Blocktrades and the Hive community who forked away from the Steem blockchain in March 2020 to create a new network that is free from Sun’s control. The Hive blockchain has since grown to become one of the most active and innovative platforms for decentralized applications, content creation and social media.
Blocktrades founder Dan Notestein expressed his satisfaction with the outcome of the lawsuit, saying that it was a “vindication of our rights and principles”. He also thanked the Hive community for their support and solidarity throughout the ordeal.