Just a day was sufficient for internet sleuths to find court documents filed this December 2017 between Kosala Hemachandra and Taylor Monahan.
According to the document, Hemachandra had offered one million dollars to buy out Monahan’s shares of MyEtherWallet (MEW). A lawyer for Hemachandra says in October 2017:
“We gave them a few days to discuss an amicable solution between themselves, but based on the recent communications, it seems unlikely that our client will come to an agreement that would allow MEW to exist with both of them as equal owners.”
At this stage they appear to have mutually agreed to dissolve the company with Hemachandra’s lawyer stating:
“To expedite the dissolution process, and to reiterate our previous demand, we would like to schedule a time to review MEW’s books and records.”
Five days later, on October 10th, the same lawyer says “our office will work on drafting the membership purchase agreement for our client to purchase your client’s interest in MEW for $1 million.”
MEW LLC was dissolved just two days after the case was filed, with the dissolution document signed by Taylor Monahan and Mark Katakowski.
Monahan appears to have been the sole director and the CEO of MEW LLC, with Hemachandra and Katakowski listed as shareholding members.
The distribution of shares between the three is not listed, which might imply they all held an equal amount as further shown by Hemachandra’s lawyer stating “both of them as equal owners.”
This story appears to have begun around August 2017, which is when MyCrypto LLC was incorporated. Why this company was formed is unclear, with MyCrypto not responding to our request for comments at the time of publishing.
In a new document, MyCrypto says Monahan and Hemachandra launched MEW three years ago, before further adding:
“While it was a great partnership for a majority of that time, ultimately this partnership ended by mutual agreement. We cannot disclose the terms of the mutual agreement, but both founders were aware of this split and the subsequent transition.”
We have therefore to try and make sense of it all based on the facts available since neither is talking. Logically, there are two scenarios, either Monahan wanted to leave MEW or Hemachandra did.
As they both are continuing to provide a service they have together provided at MEW for the past three years, the split is likely to do with how the company should grow. In particular, perhaps, whether there should be external funding.
Monahan mentions in her statement they are overworked and that they have been growing very fast. Which translates to: they need resources. That might mean either external funding or a buy out offer.
Hemachandra probably did not want to go that route, perhaps thinking they can manage on their own. If this was what happened, they both would have clearly felt very strongly about it, with the tension then descending to the point Hemachandra’s lawyer says their client would not “allow MEW to exist with both of them as equal owners.”
A split, therefore, was inevitable. To make sense of Hemachandra’s one million dollars offer, based on all the facts, we think what likely happened is he was aware MyCrypto was to launch, but wanted MEW to continue.
He, therefore, probably wanted to buy out Monahan and become sole owner of MEW while Monahan focuses on MyCrypto. It’s unclear, however, why Monahan would have wanted to continue being a shareholder of MEW, save, perhaps, for the assets she had help create for the past three years.
There could be another version here where Monahan is forced to leave by creating a new company perhaps because there was a buy offer Hemachandra wanted to accept.
But the sum of $1 million does seem very low, with Monahan moving instead to dissolve the company, which presumably would mean the company assets would have to go through a distribution process.
Whichever version, and whoever was the prime mover of the split, this is very much a typical story for a start-up at this stage. As anyone who goes through it knows, there comes a time when you have to make the biggest decision in the business’ life, and that decision is probably the most difficult one.
The two, therefore, appear to have genuinely split. Perhaps not in the best way, but divorces can be messy. We do not therefore find much fault based on the facts provided and if our analysis is correct regarding the split.
The question of the twitter account is a difficult one and very much one for the lawyers, but we know from the court documents both do have lawyers, so MyCrypto would have probably been advised they can take possession of it unless the entire team of 20 at MyCrypto, who are also seemingly advised by BoostVC, went against their lawyers. MyCrypto says:
“The team working at MyCrypto is the same team that has managed MyEtherWallet’s Twitter handle for the past three years.
The content that has been shared on @MyEtherWallet since 2015 is the thinking of the team that now makes up MyCrypto.”
If that is true, and if indeed the entire team disagreed with Hemachandra, then calling it a rebranding might not be that far fetched.
That does not mean Hemachandra was wrong regarding whatever decision they had to make because we don’t know what the decision was so we can’t pass judgment on it.
But if the decision was of a nefarious kind, we most probably would know by now what it was as the higher ground party would have very much said or leaked it somehow.
Which leads us to conclude it was probably a genuine disagreement on how to move forward, and as there is no right or wrong answer in such situations until time does tell, we are not in a position to fault if our analysis is correct.
But we are in a position to view the twitter handle in a different angle, and if indeed the entire MEW team, except for one, is now MyCrypto, it’s unclear why that one man should have the twitter.
Because those who followed MEW followed the product and the team behind it, which it is true did include Hemachandra but also included 19 others.
We don’t know what Hemachandra contributed exactly and how significant he was to the end product, but if we were a court we would give the twitter account to MyCrypto based on the limited facts we have, just as we would encourage Hemachandra, in the strongest words, to make MEW as big a success as possible.
Because at the end of it, competition can only be beneficial, and it is only through such competitive diversity that we can know for sure who exactly was right in the years to come.