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TLDR
Jonathan Mills, founder of Hashling NFT, accused of misappropriating millions from NFT project and Bitcoin mining operation
Investors sued Mills for fraud and breach of fiduciary duty, claiming they received no promised equity returns
Plaintiffs raised $1.46 million from NFT drops on Solana and Bitcoin blockchains
Mills allegedly created flawed shareholder agreement giving himself 67% equity while investors got just 2%
Mills reportedly had no money or NFT experience when starting the project with investor Dustin Steerman
Investors in the Hashling NFT project have filed a lawsuit against founder Jonathan Mills, alleging he misappropriated millions of dollars and failed to pay promised equity returns. The May 14 court filing in Illinois accuses Mills of stealing profits from both the NFT project and a related Bitcoin mining operation.
According to court documents, Mills allegedly lied about transferring assets from Hashling NFT and at least $3 million from a Bitcoin mining project to Satoshi Labs LLC (formerly known as Proof of Work Labs LLC), where he serves as founder and CEO.
The plaintiffs claim they raised a combined $1.46 million from two NFT drops on the Solana and Bitcoin blockchains. Despite this success, they say they’ve received no returns on their investments.
After the NFT drops, the plaintiffs allege Mills began “ghosting” them. They accuse him of creating a flawed shareholder agreement to falsely support his claim that his holding company controlled the project’s assets.
Questionable Shareholder Agreement
The disputed shareholder agreement allegedly gave Mills a 67% equity share in Proof of Work Labs, while several investors who contributed up to $20,000 received just 2% equity each. Mills also held a 67% voting stake on all company matters, with no other partner holding more than 2%.
The plaintiffs claim Mills assured them their equity stakes would remain unchanged when he later renamed the company to Satoshi Labs. When contacted by Cointelegraph, Mills did not provide an immediate response to these allegations.
The court filing reveals that the Hashling NFT project began as a different concept initially discussed between Mills and plaintiff Dustin Steerman. The two had established a rapport from previous collaborations.
Project Origins and Team Building
Interestingly, Mills reportedly told Steerman at the outset that he had neither money nor NFT-related experience to contribute to the project. Despite these limitations, they proceeded with the Hashling NFT venture.
“[Mills] had a willingness to help push the project forward, and he did have an idea at the start,” said Clinton Ind of Ind Legal Group LLC, the investor’s attorney, in comments to Law360. “Even though that wasn’t the final idea, it did embolden it, and… everyone kind of enjoyed working together in those early stages.”
To help ensure the project’s success, Mills and Steerman brought in additional investors who are now also plaintiffs in the case. These team members assisted with various aspects of the project, from NFT art creation and social media marketing to attending NFT conferences in New York.
The case documents even claim Mills convinced his girlfriend to invest in the Hashling NFTs project.
The lawsuit seeks multiple remedies, including claims for fraud and breach of fiduciary duty. The plaintiffs have also requested a constructive trust over the project’s assets and full legal restitution.
The case highlights the risks investors face in the largely unregulated NFT space, where project governance and financial transparency often rely heavily on trust between founding partners.
The plaintiffs continue to pursue legal action as they seek to recover their investments and promised returns from the allegedly mismanaged project.
According to the court filing, the claimed misappropriation included both NFT sales proceeds and profits from the related Bitcoin mining operation that was closely tied to the Hashling project.
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