ZKsync's Matter Labs is Sued for IP Theft! Will Sentiments Recover from ZK?

Matter Labs, the high-profile blockchain company behind the Ethereum Layer-2 scaling solution ZKsync, is under fire again—this time from a defunct fintech player that claims it was robbed of its intellectual property. 

Bankex, a once-promising digital asset banking platform, has filed a lawsuit in the New York State Supreme Court alleging that its former employees used company resources and proprietary technology to create what is now ZKsync. 

This legal battle raises important questions about the foundations of ZKsync, the future of Matter Labs, and investor confidence in the ZKsync ecosystem.

Allegations of Intellectual Property Theft

The complaint, filed on March 19, 2025, centers around former Bankex employees Alexandr Vlasov and Petr Korolev. 

According to Bankex CEO Igor Khmel and the Bankex Foundation, the two developers were initially assigned to work on Ethereum’s “Plasma” technology in 2017 after Vitalik Buterin, Ethereum’s co-founder, reached out to Bankex for assistance.

Instead of fulfilling their responsibilities, the lawsuit alleges Vlasov and Korolev used Bankex’s research, resources, and internal codebase to secretly build a rival blockchain company: Matter Labs. 

Today, Matter Labs is best known for developing ZKsync, a zero-knowledge (zk) rollup protocol that offers high-throughput, low-fee transactions on Ethereum.

Bankex alleges that not only was the technology misappropriated, but these developers covertly moved critical codebases and frameworks to build Matter Labs, all while being employed and paid by Bankex.

Read also: What Happened to ZKsync? Hacks and False Airdrop Promises Left Community Disappointed

A Web of Defendants

The lawsuit doesn’t just stop with Vlasov and Korolev. It also names Alex Gluchowski, co-founder of Matter Labs, along with investors like Dragonfly Capital and Chris Burniske from Placeholder Capital. 

Bankex claims these parties had knowledge of the IP theft or were complicit in helping the accused former employees develop and commercialize the technology derived from Bankex.

Gluchowski and other defendants have categorically denied the allegations. A Matter Labs spokesperson called the claims "entirely without merit," emphasizing that ZKsync is built on proprietary, original technology and not on any stolen code.

Read also: Meteora is Being Sued after Alleged Pump and Dump Scheme!

Matter Labs' Legal and PR Headaches

This isn’t the first time Matter Labs has faced allegations of intellectual property misuse. In 2023, Polygon accused the firm of using parts of its zk-proof system, Plonky2, without proper attribution. 

Matter Labs had used some of the code in its own zk-proof system, Boojum, and controversially claimed Boojum was "10x faster" than Plonky2.

Though Matter Labs later stated only 5% of the code was used and with attribution, the damage to its reputation lingered. The company was again thrust into controversy in 2024 when it tried to trademark the term “ZK”—a generic acronym for zero-knowledge. 

This sparked criticism from other zk ecosystem players like StarkWare and again, Polygon. Matter Labs eventually withdrew the trademark filing in June 2024.

Adding to these woes, in September 2024, Matter Labs laid off 16% of its workforce due to "market shifts and strategy realignments," highlighting the broader struggles the firm faces amid ongoing regulatory and competitive pressure.

Read also: Analyzing ZK Marketcap from CMC, Is This a Sign of Community's Disappointment

Impact on ZKsync and Community Sentiment

ZKsync has been a key player in Ethereum's scaling roadmap, offering an efficient alternative for decentralized apps (dApps), DeFi protocols, and NFT platforms. 

Yet, these repeated legal and public relations battles could weigh heavily on community trust, developer engagement, and even investor sentiment.

With over $450 million in venture funding and wide recognition across the blockchain industry, Matter Labs is no small player. If the lawsuit gains traction in court, it could unravel years of innovation—or at the very least, stall progress and adoption for ZKsync.

Whether the allegations are ultimately proven or dismissed, the spotlight on the project is unavoidable. 

In the short term, expect volatility in ZKsync sentiment, increased scrutiny on its codebase and IP origins, and perhaps a pause in new major partnerships.

FAQ

1. What is ZKsync, and who is behind it?

ZKsync is a Layer-2 scaling solution for Ethereum, developed by Matter Labs. It leverages zero-knowledge proofs (zk-rollups) to enable faster and cheaper transactions while maintaining Ethereum's security.

2. What are the IP theft allegations against Matter Labs?

Matter Labs is being sued by Bankex, which alleges that its former employees used Bankex's proprietary technology and internal codebase to create Matter Labs and ZKsync without authorization or credit.

3. Has Matter Labs faced similar accusations before?

Yes. In 2023, Polygon accused Matter Labs of using its zk-proof code (Plonky2) without proper attribution. Matter Labs denied wrongdoing, claiming minimal and credited code use.

4. What could happen if Matter Labs loses the lawsuit?

If the court finds Matter Labs guilty, the company could face financial penalties, be forced to modify or halt ZKsync development, or lose investor confidence—potentially impacting the broader Ethereum ecosystem.