Matter Labs, the firm behind the layer-2 blockchain ZKSync, has been implicated in a lawsuit by BANKEX, a now-defunct digital asset banking service, alleging theft of intellectual property.

According to the complaint filed on March 19 in the New York State Supreme Court, two former BANKEX employees, Alexandr Vlasov and Petr Korolev, supposedly misappropriated the company’s technology during their tenure to establish Matter Labs, which has since attracted upwards of $450 million in venture capital and emerged as a key figure in the blockchain sector.

The lawsuit states that BANKEX’s CEO, Igor Khmel, in 2017 engaged Vitalik Buterin, Ethereum’s co-founder, to develop operational software for ‘Plasma’, a concept aimed at reducing Ethereum’s cost of use. Vlasov and Korolev, directed by Khmel, were expected to work on this Plasma initiative.

However, they allegedly covertly formed Matter Labs, intending to leverage BANKEX technology for their gain and to position it against BANKEX in the market. They purportedly transferred BANKEX’s technology to Matter Labs while using the company’s resources for their own code development.

Presently, Vlasov holds the role of head of R&D at Matter Labs, while Korolev leads a blockchain security firm named OXORIO. The lawsuit also implicates co-founder Alex Gluchowski, the investment group Dragonfly, and Chris Burniske from Placeholder Capital for purportedly participating in or being aware of the alleged theft.

A spokesperson for Matter Labs commented that they perceive the allegations as without merit, emphasizing that the technology behind ZKsync is original and not derived from any work at BANKEX. They look forward to disputing these claims in court.

BANKEX’s counsel, Clayton Mahaffey, restated their confidence in the allegations and eagerness for the case to be adjudicated in due course.