ConsenSys integrates PayPal into its MetaMask Web3 wallet to explore new ways of buying cryptocurrency amid Swiss court ruling.
The Web3 company and MetaMask developer ConsenSys is integrating PayPal into the MetaMask wallet to improve Ethereum purchase efficiency.
“This integration with PayPal will allow our US users to not just buy crypto through MetaMask, but also to easily explore the Web3 ecosystem,” comments Lorenzo Santos, MetaMask product manager.
This new functionality is currently available to select US users. However, a rollout to all eligible US customers is expected to arrive in weeks.
The MetaMask and PayPal integration is ConsenSys’ latest attempt to improve and diversify payment options for MetaMask users.
In addition to making crypto on-ramps more accessible, ConsenSys is also working to reduce Ethereum’s carbon footprint. The company convened the launch of the Ethereum Climate Platform back in November, with the likes of Microsoft also on board.
But while it appeases the needs of its most active user base, across the pond, the company has found itself in need of a solution in a Swiss courtroom.
Zug Cantonal Court ruling
It starts with ConsenSys signing and executing a sales and contribution agreement (SCA) back in 2020. This SCA transferred a large number of assets from ConsenSys AG to the then-newly created entity, ConsenSys Software Inc.
These assets included Metamask, Infura, Truffle, Codefi, Pegasys and a range of regional consulting businesses. However, shareholders allege that the SCA was conducted without their notification.
ConsenSys Software Inc. subsequently raised three investment rounds totalling $715million from both individual and institutional investors with a reported final valuation of $7billion.
On 16 November 2022, a judge of Zug Cantonal Court, Switzerland, ruled in favour of a group of shareholders. This group is requesting a vote to approve or reject the transaction.
The shareholders also argue that because Joseph Lubin was a director and majority shareholder in both entities, he acted under a conflict of interest.
Lubin contends that he was not the director of ConsenSys Software Inc. at the time the agreement was signed. However, the fact that he was a majority shareholder is undisputed by both companies. This may contribute to a conflict of interest.
Likewise, the shareholders are contending that ConsenSys AG director, Frithjof Weinert, was not validly elected by shareholders at the time of the transaction.
They say this is due to an illegal two-year cessation of annual general shareholder meetings. And because of this, the transaction for ConsenSys AG was not properly completed.
“It does not seem outright absurd [to suggest] that the board of directors was in a conflict of interest when signing the SCA,” a translation of the court’s ruling reads. “Therefore, the item on the agenda is to be submitted to the general meeting for a resolution.”
Left with nothing
Regardless of the outcome, once the vote takes place, the transaction will become the subject of a shareholder meeting resolution. Under Swiss law, resolutions can be challenged in court.
Shareholders could legally claim that the most valuable assets were not validly transferred and are still owned by ConsenSys AG.
A concurrent shareholder request for a special audit of the SCA is expected to be ruled on in the coming weeks. This request was made in March 2022, however, repeated challenges by ConsenSys AG have delayed the ruling. If successful, the audit is expected to further strengthen the shareholder’s legal position.
“Many team members took massive pay cuts in exchange for a generous equity package. Some staff deliberately chose not to purchase Ethereum between 2015 and 2017. They felt they were effectively investing in the ecosystem through the ConsenSys equity they were vesting,” comments shareholder and ex-employee, Arthur Falls.
Falls explains that because of Lubin’s actions, ConsenSys AG has “virtually evaporated,” meaning investors are “left with nothing.”
“Lubin of course is still the majority owner of the assets his employees built,” he concludes.