Composable Finance’s CEO, Omar Zaki, has recently been faced with allegations of legal improprieties at his DeFi infrastructure platform. These allegations were made by the firm’s former CTO, Karel Kubat, in a Feb. 20 Twitter post in which he announced his resignation from the firm.
Kubat’s post accused the firm of not providing financial statements to him or the community and claimed that he had no overview of the company’s financial health. He also alleged that Zaki was involved in the raising of Series A funds for the company in violation of a cease-and-desist mandate from the U.S. Securities and Exchange Commission (SEC). Furthermore, Kubat claimed that Zaki’s role in the alleged rug-pull project, Bribe, was “much greater than he publicly stated.”
In response to these allegations, Zaki took to Twitter Spaces for an AMA on Feb. 20, during which he vehemently denied all accusations made by Kubat. He stated that all of the company’s actions to his knowledge were done in full accordance with the law.
Zaki clarified that Composable Finance is a private company and therefore cannot publicly release financial information. However, he stated that the company has sufficient resources, personnel, and technology to execute its strategies and that there is nothing that should cause concern to the public.
Regarding the alleged violation of orders from the SEC, Zaki claimed that the Series A fundraiser was done completely offshore and was compliant with the laws in the countries where it took place. He stated that the company retained legal counsel to ensure that no laws were broken.
Zaki also denied any involvement in the Bribe project, stating that Composable Finance had no part in it.
Composable Finance is the developer of a cross-chain bridging and messaging protocol. In Feb. of 2022, it raised over $100 million through a parachain auction on Polka Dot. Ten days after the fundraise, blockchain sleuth ZachXBT doxxed the company’s CEO, revealing that the CEO is Omar Zaki, known as “0xbrainjar.”
In an April 1, 2019 settlement, the SEC accused Zaki of repeatedly misleading investors in the Fund about assets under management, fund performance, and fund management during his role as an executive for Warp Finance and Force DAO. As part of the settlement, Zaki was barred from raising money for investors in the U.S.
It is important to note that the SEC action was a civil cease-and-desist order, and Zaki has not been convicted of violating any criminal laws.
The accusations made by Kubat are serious and have the potential to damage Composable Finance’s reputation. However, Zaki’s response to the allegations is detailed and thorough, and he denies any wrongdoing. It is ultimately up to the community to decide which side to believe.
In conclusion, Composable Finance’s CEO Omar Zaki has denied all allegations made by the firm’s former CTO Karel Kubat. Zaki maintains that all of the company’s actions were done in accordance with the law and that there is nothing to cause concern to the public. The allegations made by Kubat are serious, but Zaki’s response is comprehensive and detailed. It is important for the community to consider all available information before making a judgment.