Composable Finance CEO denies wrongdoing as CTO resigns
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The CEO of Composable Finance has vigorously denied claims of legal irregularities on its decentralized finance (DeFi) infrastructure platform broadcast by the company’s former CTO Karel Kubat.
In a February 20 Twitter post, Karel Kubat, now former CTO of Composable Finance, made the announcement kicked off the company. He also made a number of allegations against his former company and its CEO.
In Kubat’s post, the CTO said he was resigning because the company had failed to provide him or the community with financial statements and because he had no oversight of the company’s financial health.
However, he said he suspects CEO Omar Zaki, who was barred by law from raising money for companies, was involved in raising Series A funds for the Company in violation of an injunction issued by the Securities and Exchange Commission.
He also said Kubat suspects Zaki’s role in alleged rug-pull project Bribe was “much larger than he publicly stated.”
React Following Kubat’s resignation, Zaki took to Twitter Spaces for an AMA (Ask Me Anything) on February 20, in which he vigorously denied all allegations. He claimed that, to his knowledge, all of the company’s actions were in full compliance with the law.
1/ We are sorry to inform you that Composable Finance has parted ways with our former CTO.
While this naturally raises questions and concerns, our team strives to answer these questions and address any concerns.
— Composable Finance (@ComposableFin) February 20, 2023
Responding to claims of a lack of financial transparency at the company, Zaki explained that the company is private and cannot release financial information publicly.
“However, we remain very confident that we have sufficient resources, human resources and the technology to actually implement our strategies (…) there is nothing here that worries me or should concern the public,” he said.
Zaki also denied violating orders from the SEC, stating that the Series A fundraiser was conducted entirely overseas and complied with the laws in the countries where it took place. Zaki explained that the company hired legal counsel to ensure no laws were being broken, as he explained:
“These allegations are false, the Series A was designed as an offshore sale of utility tokens and we had outside advice advising on the offering (…) I had made it very clear that all Composable offerings were conducted with adequate legal counsel.”
As for the claim that Composable was involved in the Bribe project, Zaki said flatly, “We were not involved in the Bribe project.”
See also: Mutant Ape Creator Arrested for Alleged ‘Cheating’
Composable Finance is the developer of a cross-chain bridging and messaging protocol. In February 2022, it raised over $100 million through a parachain auction on Polka Dot. Ten days after the fundraiser, prominent blockchain sniffer ZachXBT successfully doxxed the company’s CEO, known as “0xbrainjar,” revealing that the CEO is Omar Zaki.
In an April 1, 2019 settlement, the SEC accused Zaki of “repeatedly (misleadingly) leading investors in the funds about assets under management, fund performance and fund management” during his role as an officer for Warp Finance and Force DAO. As part of the settlement, Zaki was barred from raising money for investors in the US
However, the SEC action was a civil injunction and it is understood Zaki was not convicted of violating any criminal statutes.
ZachXBT too accused Zaki of having been involved in Bribe, an alleged carpet-pulling scam, in the past.
