Avalanche founder Emin Gün Sirer said the allegations – which drove the AVAX token down about 11% – are “categorically false.”

Emin Gün Sirer has denied his company, Ava Labs, has been involved in a behind-the-scenes smear campaign against competitors of Avalanche, the firm’s $5 billion layer 1 blockchain, calling recent allegations “categorically false.”

“These claims evidently came about when Kyle Roche, a lawyer at a firm we retained in the early days of our company, tried to impress a potential business partner by making false claims about the nature of his work for Ava Labs,” wrote Gün Sirer in a statement Monday.

Gün Sirer spoke after an Aug. 26 report on whistleblower site Crypto Leaks alleged Ava Labs executives paid law firm Roche Freeman to smear competitors using class-action lawsuits that would attract greater scrutiny from crypto regulators such as the U.S. Securities and Exchange Commission (SEC). The allegations sent Avalanche’s AVAX token plummeting about 11%, although it has since rebounded somewhat. AVAX is the 16th-largest cryptocurrency by market value, according to CoinMarketCap.com.

Gün Sirer, an ex-Cornell University professor turned blockchain entrepreneur, wrote that he was “disheartened” by the crypto community’s reaction to the news, which he dismissed as “obvious nonsense.”

According to Gün Sirer, Avalanche does not entrust its legal affairs to Roche, and did not direct him to file any lawsuits towards other projects – including, for example, a July class-action lawsuit against Solana Labs, the team behind the multi-billion-dollar Solana blockchain. The lawsuit alleged that Solana’s SOL token is an unregistered security whose investors have profited at the expense of retail buyers.

“For instance, we learned about the Solana lawsuit only through the press, were livid that he was suing another project and attempted to persuade him to drop the case,” wrote Gün Sirer.

Gün Sirer says Roche has only handled a few “minor” legal cases regarding Avalanche.

Roche, in his own statement, denied that a “secret pact” exists between his law firm Roche Freeman and Ava Labs.

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A $5.25 billion valuation would place Ava Labs in the upper echelons of most valuable crypto startups in the world.

Ava Labs, builder of the Avalanche blockchain, is in the process of raising a new funding round that would give it a $5.25 billion valuation, according to a Bloomberg report Thursday.

The Brooklyn, New York-headquartered startup is raising $350 million, according to the report citing people familiar with the discussions.

A $5.25 billion valuation would place Ava Labs in the upper echelons of most valuable crypto startups in the world, though still some way behind the likes of Ethereum scaler Polygon which is worth $20 billion as of its recent funding round or USDC stablecoin backer Circle, valued at $9 billion in February.

Like several other blockchains, Avalanche is looking to draw projects and applications away from Ethereum with the promise of high speeds and low transaction fees. Specifically, Avalanche offers “subnet” functionality, where application-specific blockchains can be spun up at scale.

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