Composable Finance CTO resigns citing unethical management, CEO dismisses allegations
- In a tweet, Kubat expressed concerns that Composable Finance was engaging in “possible trading with company funds and suspicious transactions.”
- CEO Omar Zaki claims that all of the firm’s actions to his knowledge were done in full accordance with the law.
On February 20, Composable Finance’s chief technology officer, Karel Kubat, stepped down from the firm, citing a lack of transparency and “unethical management” in the organization.
While resigning, Kubat raised serious accusations against the company and its CEO Omar Zaki. In a tweet, Kubat expressed concerns that the deFi organization was engaging in “possible trading with company funds and suspicious transactions.”
Further raising allegations at company CEO, Kubat states he suspects Omar Zaki, who has been legally prohibited from raising money for companies, was involved in raising Series A funds for the firm in violation of a cease-and-desist order from the United States Securities and Exchange Commission(SEC). Kubat also claims that Zaki’s role in the alleged rug-pull project called Bribe was “much greater than he publicly stated.”
“I believe that Omar’s role in Bribe was much greater than he publicly stated after the ZachXBT outing. This is purely based on public information”, his tweet reads.
In another tweet, Kubat said, “Enforcing the law is left up to the authorities. We’re a decentralized community, however, and simple, unethical management is enough for me to leave.”
Confirming Kubat’s departure, Composable Finance tweeted, “We’re sorry to announce that Composable Finance has parted ways with our former CTO”. In response to the allegations, Zaki took to Twitter via Ask me Anything session to rubbish all accusations.
He claims that all of the company’s actions, to his knowledge, were done in full accordance with the law. Commenting on the lack of transparency accusation raised by Kubat,Zaki stated that the company is private and cannot publicly release financial information.
Explaining that the Series A fundraiser was done completely offshore and was carried out in compliance with laws in the countries where it took place, Zaki stated:
“Those allegations are incorrect, the Series A was designed as an offshore sale of utility tokens, and we had outside council advising on the offering. I had made very clear that all offerings of Composable were conducted with sufficient legal counsel.”
The latest development also comes amid blockchain sleuth Zachxbt publishing a series of tweets accusing Zaki of hiding behind the name of “0xbrainjar,” the anonymous head of product at Composable Finance. This allegation came days after Composable Finance raised over $100 million through a para-chain auction on Polkadot.
This is not the first time Zaki has faced serious allegations. In April 2019, SEC accused Omar Zaki ’18 of misleading investors in financing an unregistered hedge fund he was operating as an undergraduate student in New Haven.