Mythical sues 3 former execs for stealing investment for their own fund

Mythical has filed a lawsuit against three former executives, alleging that they stole a strategic business plan to raise money for themselves while still on Mythical’s payroll.

Mythical sued Fenix Games and its cofounders Rudy Koch, Matthew Nutt, and Chris Ko — all former employees of Mythical. I’ve reached out to get a response from Fenix.

The suit says Mythical’s co-founder and former top executive Rudy Koch, chief operating officer Matthew Nutt, and senior vice president for corporate strategy and development Chris Ko were put in charge of developing and raising capital for the new fund, Mythical Ventures, which would help individual developers bring blockchain games to market.

Mythical said in the lawsuit it began developing plans for Mythical Ventures in 2021. It contributed $4 million for the fund and put Koch, Nutt and Ko — all members of the senior executive team — in charge of its development.

In April 2022, Ko allegedly made a presentation to the Mythical board of directors detailing the fund’s strategic business plan, investment thesis, target gaming sectors and initial pipeline of deals.

Mythical then sent the executives to Dubai four times in 2022 to raise capital from investment firms interested in blockchain technologies. One of Mythical’s investors introduced Koch, Ko and Nutt to Cypher Capital, a Dubai investment firm specializing in blockchain strategies.

But instead, the lawsuit alleges the defendants used Mythical’s connections and business plan to secretly steer investor money to themselves and set up their own copycat firm, called Fenix Games, which they announced within weeks of abruptly quitting Mythical in November of this year.

The scheme came to light after the three abruptly resigned in November and, a few weeks later, announced that their new firm, Fenix Games, had raised $150 million — with Cypher Capital, whom Mythical put them together with, as the principal investor, the lawsuit said.

The lawsuit lists 10 causes of action against Koch, Ko and Nutt for fraud, breach of contract, breach of fiduciary duty, constructive trust, intentional interference with contract, and intentional interference with prospective economic relations; and it seeks recovery of the stolen property, an injunction against its use, and compensatory and punitive damages.

“I can’t offer any comment on the details of the ongoing litigation,” said Nate Nesbitt, head of communications at Mythical, in a statement. “I can say that we believe very strongly in the protection of our intellectual property and corporate assets. In this instance, it was necessary to take these steps to rectify this situation and protect the company’s corporate interest, as is our duty to our employees and investors.”

Originally appeared on: TheSpuzz