In Re Coinmint, LLC

Coinmint, LLC, a bitcoin limited-liability company (LLC) registered in Delaware, was founded by Prieur Leary and Ashton Soniat. Leary’s company, Mintvest Capital Ltd. (Mintvest) (plaintiff), and Soniat’s entity, Coinmint Living Trust (CLT) (defendant), were Coinmint’s only members. Initially, Mintvest and CLT shared a 50 percent membership interest in Coinmint. Leary was in charge of Coinmint’s day-to-day operations, and Soniat contributed cash to fund the operations. Coinmint’s operating agreement provided that if Soniat made capital contributions, Mintvest’s membership interest would be diluted. Leary and Soniat disregarded the corporate formalities provided in the operating agreement and did not hold board meetings. Pursuant to the operating agreement, Mintvest’s interest was to be diluted significantly following Soniat’s capital contributions. Ignoring the dilution provisions of the operating agreement, the parties entered into an agreement setting Mintvest’s membership interest at 18.2 percent and CLT’s membership interest at 81.8 percent. CLT converted Coinmint to a Puerto Rico LLC without following the operating agreement’s formal procedures and without objection from Mintvest. Leary agreed to the uneven split in membership interest and the conversion so that Soniat would continue providing cash. After disagreements arose, CLT unilaterally amended the operating agreement, removed Mintvest’s membership interest, and designated CLT as Coinmint’s sole member. Mintvest filed suit, seeking to nullify the corporate conversion.