The public dispute between IOTA co-founders Sergey Ivancheglo and David Sønstebø has escalated, with many IOTA community members expressing concerns over a full meltdown in IOTA.

Some IOTA members on twitter also believe that David may have scammed investors by retaining all unclaimed IOTA tokens related to the JINN project, which amounted to 65 Ti.

The rift began a few days ago after IOTA co-founder Sergey Ivancheglo raised threats of legal action against David Sønstebø, another of IOTA’s co-founders.

Ivancheglo accused Sønstebø of embezzling $7.7 million worth of IOTA tokens and added that he would no longer work with David.

It appears the accusations have to do with the funding for JINN Labs, a distributed computing hardware company he co-created with David Sønstebø back in 2014. The company was first launched before the establishment of the IOTA project.

In a rebuttal, David Sønstebø then proceeded to pen a lengthy Medium post where he addresses the petulant actions of Sergey Ivancheglo.

He asserted that Ivancheglo already deprived himself of his MIOTA tokens by failing to come up with his prototype of a coordinator-free IOTA.

An Unavoidable Rift in the IOTA Community

David suggests that despite their earlier cooperation, when IOTA started to make significant progress, Ivancheglo started to distance himself from it, inevitably resulting in the two IOTA co-founders falling apart.

David insists that they made a fair deal with Ivancheglo, and he wanted him to succeed. He added:

“I’d give him all Jinn IP, engineers, advisors, brand, whatever, and we’d split Jinn Labs’ token assets on the respective networks”

While David Sønstebø has the option to sue his former partner, he doesn’t plan to do so because he doesn’t want to drag out the dispute or appear petty in the eyes of the IOTA community.

The IOTA founder also suggested that the raging success of the JINN project might have displeased Ivancheglo, leading to the current rift.

How It All Started

The quarrel began in June of 2019 when Ivancheglo stepped down from IOTA’s Board of Directors.

Following his resignation from IOTA Foundation, Ivancheglo was quoted claiming that he no longer believed the Foundation was the right place for him to accomplish all that he and David had set off to develop back in 2014.

At first, it seemed that the split would be amicable, but the latest move by Ivancheglo threaten legal action puts a different spin on the ongoing and heavily publicized rift.

