Of all the things I’d like to be a part of, a common law general partnership is nowhere on the list. These nifty default organizational structures are what you get when you go into business with a bunch of people, hoping to make a buck (or a token) and don’t bother to attend to corporate formalities — because blockchain, man, or because you just didn’t bother. One of the problems with a common law general partnership is that you can end up jointly and severally liable for the stupid things your erstwhile and unintended partners do. Sounds like fun!
I’ve been waiting for a couple of years now for someone to file a lawsuit involving a crypto project where they argued that the so-called “ecosystem” is a general partnership and this seems to have finally happened. I refer to a new lawsuit involving the Verge cryptocurrency says specifically that “The Verge Crypto-Currency General Partnership (the “Partnership”) is a “common-law general partnership” of various persons listed in the Verge Black Paper who are engaged in the development and marketing of the Verge Crypto-Currency (the “Verge Coins”). The Partnership may be served through one its partners, Justin Valo, at [his street address], or wherever he may be found.”
Valo is one of the defendants as well, and was according to the Complaint one of the project’s prime movers. But interestingly, at least to me, given the general partnership allegation, if you were listed in the Black Paper, you could be in for an interesting ride, at least in theory.
This lawsuit weighs in at 21 pages and we have to slog through to page 11 before we finally get to the hack that seems to be the thing that got the lawsuit off the ground.