Vitalik Buterin and Ethereum Foundation Face Lawsuit

EthereumETH-1.19% co-founder Vitalik Buterin and the Ethereum Foundation are facing a federal lawsuit in the United States. The complaint was filed by Kayleen Fulton, a former senior employee who alleges she was wrongfully terminated shortly after disclosing a serious medical condition.

Fulton states that her termination occurred just 13 days after she informed leadership about her ovarian cancer diagnosis. However, her court filing connects the decision to an internal workplace conflict over a controversial company document.

The Origins of the Workplace Dispute

During her time at the Ethereum Foundation, Fulton led the Protocol Support team. She was responsible for organizing the All Core Developers meetings, which are regular calls where blockchain engineers discuss and decide on technical updates for the Ethereum network.

The conflict began in February when the organization's board distributed an internal vision document titled the Mandate to staff members. According to the court filing, one page of the document included an unusual pledge requiring individuals to take their own lives with a sword if they ever breached the agreement.

The pledge caused concern among employees. A total of 79 staff members voted to remove the phrase from the document. Despite the vote, the board chose to keep the text intact.

Employee Resistance and Firing Timeline

Following the vote, Co-Executive Director Bastian Aue informed employees that they must commit to the Mandate in writing. He stated that anyone refusing to sign would be treated as having resigned from the organization.

On March 24, Fulton disclosed her ovarian cancer diagnosis to leadership. The next day, on March 25, Fulton and her colleague Trent Van Epps submitted a letter signed by 53 staff members. The letter formally declined to accept the Mandate under the board's required terms.

On April 6, Aue fired both Fulton and Van Epps approximately 30 minutes apart. The lawsuit alleges that no specific official reason was given for their immediate dismissal.

Statements Cited in the Lawsuit

The legal complaint references a recorded conversation where Vitalik Buterin discussed the situation when asked about the dismissals.

If you reward making a stink with outcomes, then everyone will know that essentially making that kind of a show both internally and externally is the way to cause outcomes inside of the EF.

Regarding the language in the Mandate, Aue told staff that the sword pledge was not intended to be taken literally, according to court documents.

Legal Arguments and Financial Claims

In May, attorneys representing the Ethereum Foundation's Singapore entity denied allegations of workplace retaliation. They argued that Fulton's initial severance agreement mandates that any legal disputes must be settled through arbitration in Singapore.

Fulton claims that she has rescinded that severance agreement and returned the money. She is seeking back pay based on her $195,000 annual salary, along with punitive damages. None of the allegations presented in the filing have been proven in court.

Organizational Details and Market Context

The legal entities named as defendants fund Ethereum's core developers and hold over 160,000 ETH in treasury reserves.

Historically, organizational developments within the Ethereum Foundation have coincided with shifts in market prices. For context, ETH experienced a 5% price increase when the final Mandate was published in March, and dropped nearly 7% when the Foundation announced a 20% workforce reduction in June.

Past performance of digital assets is not an indication of future results. You can view real-time market data on the Bitkub ETH Market.

Following the events described in the filing, Fulton's former team was dissolved, and most of the 53 staff members who signed the protest letter have left the foundation. The court proceeding currently awaits a decision from a Colorado federal judge on whether the lawsuit will remain in US courts.