Composable Finance CEO denies legal violations as CTO steps down
The CEO of Composable Finance has strongly denied allegations of legal violations on its decentralized finance (DeFi) infrastructure platform, which were raised by the firm’s former CTO Karel Kubat.
In a tweet dated February 20, current Composable Finance CTO Karel Kubat announced that he stepped down from the firm. He also made a number of accusations against his former company and its CEO.
In Kubat’s message, the CTO said he was resigning because the firm had not provided financial statements to him or the community, and because he had no idea of the company’s financial health.
However, he said he suspects CEO Omar Zaki, who is prohibited by law from raising money for companies, was involved in raising Series A funds for a company in violation of a winding-up order from the US Securities and Exchange Commission.
Kubat said that he also suspects Zaki’s role in the proposed Bribe project was “much more than he has publicly stated”.
answering prior to Kubat’s resignation, Zaki took to Twitter Spaces on February 20 for an AMA (Ask Me Anything) in which he strongly denied all allegations. He claimed that all of the company’s actions, to the best of his knowledge, were in full compliance with the law.
1/ We regret to announce that Composable Finance has parted ways with our former CTO.
While this naturally raises questions and concerns, our team is committed to addressing these issues and fixing any issues.
— Composable Finance (@ComposableFin) February 20, 2023
In response to allegations of a lack of financial transparency within the company, Zaki stated that the company is privately held and cannot release financial information.
However, “we remain confident that we have sufficient resources, personnel and technology to implement our strategies.” […] there is nothing here that would cause me concern or should cause concern to society,” he said.
Zaki also denied violating any SEC ruling, stating that the Series A fundraiser was conducted entirely overseas and complied with the laws of the countries in which it was held. Zaki stated that the company hired a legal advisor to ensure that no laws were broken, as he explained:
“These claims are incorrect, Series A was designed as an offshore utility token sale and we had a third party board advising on the proposal. […] I have made it very clear that all proposals of the composables have been carried out with sufficient legal advice.”
Regarding the claim that Composable was involved with Project Bribe, Zaki was categorical: “We were not involved in Project Bribe.
The creator of the mutant monkey was arrested on suspicion of “fraud”
Composable Finance is a developer of a bridge and messaging protocol. In February 2022, he raised over $100 million in a parachain auction on Polka Dot. Ten days after the fundraiser, renowned blockchain sleuth ZachXBT successfully doxexed the company’s CEO, known as “0xbrainjar”, revealing that the CEO is Omar Zaki.
In a decision dated April 1, 2019, the SEC accused Zaki from “Repeatedly [misleading] investors in the fund about assets under management, fund performance and fund management” when he was the head of Warp Finance and Force DAO. As part of the settlement, Zaki was banned from raising money for investors in the United States.
However, the SEC’s action was a civil cease and desist order, and it is presumed that Zaki was not convicted of violating any criminal laws.
ZachXBT also accused Zaki is that in the past he was involved with a bribe, an alleged fraud scam.
Credit : cointelegraph.com