Matter Labs, the Developer of ZKsync, Faces Lawsuit Over Alleged Intellectual Property Theft

Matter Labs, the company behind the layer-2 blockchain ZKSync, has been sued by BANKEX, a defunct digital asset banking platform, for alleged intellectual property theft. The complaint, filed on March 19 with the New York State Supreme Court by BANKEX CEO Igor Khmel and the BANKEX Foundation, claims that former BANKEX employees Alexandr Vlasov and Petr Korolev misappropriated the company’s technology to establish Matter Labs, which has secured over $450 million in venture capital funding and emerged as a significant player in the blockchain industry.

According to the complaint, in 2017, BANKEX was approached by Ethereum co-founder Vitalik Buterin to develop operational software for “Plasma,” a technology anticipated to reduce Ethereum’s transaction costs. Vlasov and Korolev, who were employees at the time, were allegedly assigned by BANKEX CEO Igor Khemel to work on the Plasma initiative. However, instead of focusing on this project, they purportedly developed a competing entity, Matter Labs, with the intent of appropriating BANKEX’s blockchain technology for their benefit and to rival BANKEX.

The complaint also asserts that the two developers were covertly transferring BANKEX’s technology to Matter Labs and secretly created and stored operational code using the company’s resources and funding. Currently, Vlasov serves as the head of R&D at Matter Labs, while Korolev is identified as the founder of the blockchain security firm OXORIO, as per their LinkedIn profiles. The legal action also names Matter Labs co-founder Alex Gluchowski, crypto-focused investment fund Dragonfly, and Chris Burniske, a partner at Placeholder Capital and former co-director at Matter Labs, for their alleged complicity and knowledge of the supposed theft.

A spokesperson for Matter Labs stated, “We believe these claims are entirely without merit… The thrust of the complaint is that Matter Labs built ZKsync on top of code that was originally developed at BANKEX. This is categorically false. ZKsync is original technology that is not based on or derived from any code developed by BANKEX. We stand by the integrity of our work and look forward to addressing these baseless allegations in court once we are served.”

Repeated requests for comment from Dragonfly, Burniske, and Korolev went unanswered. BANKEX lawyer Clayton Mahaffey remarked that the firm “prefers not to comment further on the case at this time, other than to reiterate its belief that the allegations in the complaint are well-founded and that it looks forward to its day in court.”