The Truth Will Always Win

The Truth Will Always Win

In the court’s opinion, “Liquifi is trying to compete with Toku… But there’s nothing wrong with competitors competing. This is America. We compete. It’s what we do.” – Vice Chancellor Laster

Liquifi was founded in 2021 with a simple idea: the crypto economy needed better infrastructure for token vesting, lockups, and compliant distributions. We didn't just join the category; we created it. From day one, we have been the market leader in token distribution infrastructure, and we have never ceded that position.

In late 2024, we faced a situation that, unfortunately, too many category-defining startups face: a baseless lawsuit from a competitor, Toku, accompanied by a sophisticated public relations campaign aimed at damaging Liquifi’s reputation. For four months, we stayed silent, respecting the legal process, focusing on our mission and serving our customers. On April 25, the Delaware Court of Chancery decisively denied Toku’s motion for a preliminary injunction, stating that none of its claims were likely to succeed.

As Vice Chancellor Laster noted, “If you only read the briefs and don’t delve into the underlying documents and exhibits, then it really does look like something untoward went on here… But once you dig into the documents, there’s a different story.”

Today, with the Court’s ruling now public, we are sharing our perspective, rooted in facts rather than speculation, and reaffirming our long-standing commitment to building for customers, competing fairly, and leading with innovation.

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The Dispute: Context Matters

Toku filed suit against Liquifi in December 2024, leveling sweeping allegations about the supposed misuse of trade secrets. Toku did not wait for evidence or a court ruling. It sent mass emails to customers and partners the very next day, escalating the dispute into the public eye during the holidays.

Liquifi’s leadership made a deliberate choice: focus on facts, not media cycles. We privately reassured customers and partners, honored confidentiality, and allowed the legal process to run its course.

The timing matters. In the months leading up to this lawsuit, Toku approached Liquifi on three separate occasions, proposing a merger or business combination. We respectfully declined. Shortly after those conversations ended, the lawsuit followed.

Despite Toku’s public narrative, even its own internal timeline undercuts its claims. Toku claims to have discovered alleged misconduct several months earlier, in October 2024, but waited 51 days, until the Friday before Christmas, to file suit. Somehow, this discovery did not cause Toku to hold back from making its final merger proposal just 20 days before the lawsuit was filed. That is not the behavior of a company facing imminent competitive harm. It is the behavior of a company using the legal system to attempt to disrupt a rival’s momentum.

As the Vice Chancellor put it, “skillful advocacy isn’t a substitute for the underlying facts.”

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Court Proceedings: Facts Beat Speculation

In April 2025, after reviewing extensive evidence, the Delaware Court of Chancery rejected Toku’s request for extraordinary relief. As the Court stated:

I don’t think that there is sufficient evidence to think that any of these materials… became incorporated in Liquifi’s business model…. So I don’t think there’s a meaningful threat of irreparable harm. This makes the balancing of the equities pretty easy, and it comes out in favor of the defendant.” – Vice Chancellor Laster

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“I think it’s clear that Snipes didn’t download anything in the sense that one thinks of intentionally downloading documents… it was the result of an automatic syncing program.”  – Vice Chancellor Laster

The Court’s ruling found:

• No likelihood of success on the merits.
• No showing of irreparable harm.
• No equitable basis to constrain Liquifi’s operations.

Liquifi continues to operate without restriction—and continues to serve our customers without interruption.

Setting the Record Straight

The actual litigation record—sworn testimony, discovery, and court orders—tells a different story than the one Toku tells.  Toku claims that Liquifi used its legal templates, customer lists, and certain “know-how” from its former head of legal to enhance its products.  Not true.  First, the Court found that the Toku documents at issue in the case are neither trade secrets nor confidential.  

“The fact that I’ve already held that the information doesn’t qualify as confidential… means that it doesn’t meet the higher standard required [for a trade secret].” – Vice Chancellor Laster

Moreover:

• Liquifi was built independently: As our CEO Robin Ji stated in a sworn affidavit, “No Toku documents or information were used” to advance our products or integrations. For example, generic legal templates are not something that can, “be used to develop an integrated EOR product.”  Liquifi also did not solicit business from Toku’s customers, nor did Liquifi use any of Toku’s information to build or enhance its services.
  
  
• Liquifi partnered strategically: In 2023, we recognized that customers needed token tax and payroll compliance solutions. Using a standard “build, buy, or partner” analysis, we evaluated all options. By 2024, after testing token tax processes and integrations, we chose to partner with multiple EOR and payroll providers and have been doing so for a long time, well before any employment discussions with Mr. Snipes ever occurred.

“Liquifi has been integrating its token-grant administration services with third-party EOR and payroll service providers for years now.” – Vice Chancellor Laster

• Liquifi managed hiring properly: When Mr. Snipes joined Liquifi, we explicitly instructed him not to bring any confidential Toku material. He was hired for his crypto legal experience, not for any proprietary information. He had left the crypto industry and was working at a fintech startup before joining Liquifi.

“It wasn’t a situation where Liquifi set out to steal Snipes away… It happened through a series of intermediate connections.” – Vice Chancellor Laster

“If anything, he appears to have been a good leave-er in employment parlance.” – Vice Chancellor Laster

Category Leadership and Strategic Clarity

Liquifi has always led by innovating. We pioneered token cap table management and distribution infrastructure. In 2023, as token tax compliance and the lack of solutions in the market became clearer, we recognized that supporting compliant token distributions would require collaboration across HR, payroll, and EOR platforms.

Rather than building an EOR business ourselves, which would have been an unprofitable strategic distraction from our core, we chose to partner. We integrated with a range of providers across the industry to give customers options. This was a deliberate strategy, executed months before the events Toku now points to.

Toku, by contrast, began as an EOR and only later attempted to expand into Liquifi’s domain. After failing to convince Liquifi to merge, they pivoted to litigation. But courts demand evidence, not ambition. And last week, that distinction mattered.

Looking Forward

As the case technically continues, we remain confident that the facts and the law will continue to prevail. Litigation was never a path we sought, but defending our innovation, our customers, and our ethics is non-negotiable.

Toku has recently attempted to bring Deel into the litigation and attach this matter to a bigger news cycle. We have no relationship with Deel’s external matters and no information from Toku was used in the development of our integration with Deel.

We believe the Court was clear about Toku’s chances of success — should it choose to continue with this case — and we are fully prepared to see it through to trial if necessary. 

As entrepreneurs entrusted with capital, however, we believe there are better areas to invest resources than litigation. Building great products is one of them.

We know where we stand and look forward to this matter being resolved.

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Closing Thoughts

We’re proud to have pioneered this space. We’re proud to continue leading it. And we’re grateful to every customer, partner, and supporter who has stood with us.

The truth will always win. 

(End note: If you’re a founder, investor, or operator who cares about truth in tech, go read the ruling. You don’t need spin from either side—the court record is public, and it’s worth your time.)

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