Investors who funded the Hashling NFT project are pursuing legal action against its founder, Jonathan Mills, alleging he misappropriated millions of dollars they invested in the venture, which included NFT sales and a Bitcoin mining operation. The lawsuit, filed in Illinois on May 14th, claims Mills diverted substantial funds intended for project development and returns into entities he controlled, leaving the investors without profits or even communication.
Allegations of Fund Misappropriation
Central to the lawsuit are claims that Mills transferred at least $3 million in assets to Satoshi Labs LLC, a company under his direct management. The investors contend this transfer occurred without the delivery of promised profits derived from their equity participation. They assert they collectively contributed over $1.4 million through two distinct NFT sales linked to the project, one on Solana and another related to Bitcoin. Despite these contributions, they report receiving no financial returns and eventually losing all contact with Mills.
Controversial Shareholder Structure
The plaintiffs further allege that Mills created a purportedly invalid shareholder agreement to justify his dominant control over the project’s assets. According to the legal document, this agreement granted Mills a disproportionate 67% ownership and voting rights, while other investors received only a mere 2% equity stake, even for contributions reportedly up to $20,000.
It is also claimed that a change in the company’s name, from “Proof of Work Labs” to Satoshi Labs, was used as a tactic to obscure asset control. The lawsuit suggests this renaming occurred while simultaneously assuring partners that their ownership share would remain unaffected.
Project Origins and Trust Issues
Despite reportedly admitting a lack of prior experience with NFTs at the project’s outset, Mills initially proposed the Hashling project to one of the plaintiffs. This individual then collaborated with others to bring in necessary expertise in areas like art and marketing. The complaint notes that even Mills’s own girlfriend was among the investing group, highlighting the level of personal trust involved.
The group of investors is now seeking the full recovery of their funds and requesting a constructive trust be placed on the project’s assets. They assert that Mills’s actions constitute clear instances of both fraud and breach of fiduciary duty, violating the trust and financial contributions they made to the venture.
Chris brings over six years of hands-on experience in cryptocurrency, bitcoin, business, and finance journalism. He’s known for clear, accurate reporting and insightful analysis that helps readers stay informed in fast-moving markets. When he’s off the clock, Chris enjoys researching emerging blockchain projects and mentoring new writers.