The Aragon Association published a statement in response to our disclosure.

This is our response to that statement, reiterating that the Aragon Association, for no reason, stopped payments to Autark in January 2020. Here is our timeline that includes actual events, which will be included in our official court proceedings.

Autark LLC (“Autark”) is a very small limited liability company registered in the American state of Wyoming. It was launched in 2019 to develop coordination tools for digital cooperatives. Autark is led by CEO, Yalda Mousavinia.

The AGP-73 grant agreement promised that Autark would be paid US$1.6 million to be paid in the form of DAI cryptocurrency as follows:

  • DAI 400,000 on 5 August 2019
  • DAI 400,000 on 4 November 2019
  • DAI 400,000 on 3 February 2020
  • DAI 400,000 on 4 May 2020

The initial payment valued at US$400,000 was made as agreed on 5 August 2019. Autark hired a team of 11 to perform the work required to meet its obligations under the AGP-73 grant agreement. As Autark commenced work on the deliverables, it regularly kept the community updated on its progress.

Autark requested the Aragon Association (“Aragon”) to divide its US$400,000 payment due on 4 November 2019 into two payments, so that US$200,000 would be paid to Autark on 4 November 2019, with the remaining US$200,000 payment to be delayed until January 2020.  Aragon agreed.

In November 2019, when Autark launched Open Enterprise, its flagship suite of applications for Aragon, both Mr. Izquierdo and Mr. Cuende sent congratulatory messages to Ms. Mousavinia, and indicated nothing about any dissatisfaction with Autark’s work on AGP-19 or AGP-73.

In early December 2019, Ms. Mousavinia met with Mr. Cuende where he communicated there would be changes to how grants in the Aragon Network would work. He said product features should be prioritized to optimize for product-market fit, as opposed to just checking off deliverables in the AGP. Additionally, he said that for new grants, there would no longer be large lump-sum agreements. In this meeting, nothing was indicated about any dissatisfaction with Autark’s work on AGP-19 or AGP-73.

When the time arrived for Aragon to make its payment of US$200,000 under the AGP-73 grant agreement (delayed from 4 November 2019) on 7 January 2020, Mr. Cuende refused to make the payment, unless Autark agreed to a complete termination of the grant (as well as the future incentive payments under AGP-19). Mr. Cuende’s reasoning was that there was “no legal commitment between Aragon and Autark”, essentially denying the existence of the contract.

Autark refused and demanded its delayed payment, as well for Aragon to adhere to the grant contract, as agreed. Mr. Cuende did not, however, exercise the provision in Aragon’s AGP-73 grant agreement that required Aragon to provide Autark with notice that it had 30 days to cure any alleged defects in performance, after which the AGP-73 grant agreement would allow Aragon to terminate the grant if Autark did not show evidence that it was able to cure any alleged defects in performance.

Rather, Mr. Cuende simply demanded that Autark execute a termination agreement under which Autark would receive only the DAI 200,000 remaining from the 4 November 2019 payment. Cuende insisted that Autark give up its scheduled payments for February and May 2020 under the AGP-73 agreement totaling DAI 800,000 (approximately US$800,000) as well as agreed-upon incentive packages vesting over 4 years for 350,000 ANT under AGP-19 (currently valued at over US$374,500) and 487,500 ANT under AGP-73 (currently valued at over US$521,625).  Such a termination would cost Autark over U$1.6 million.

Autark refused to sign such a termination agreement and continued to work on the AGP-73 deliverables.

When Aragon’s next installment payment to Autark of DAI 400,000 came due on 3 February 2020, Aragon refused to make that payment as well.

On 21 February 2020 Mr. Cuende posted an announcement entitled “Dissolving the Flock grants program” in which he announced that he had “decided to shut down the Flock program.”

That same day, 21 February 2020, Mr. Cuende wrote an email to Ms. Mousavinia providing a “breach of contract” notice that it intended to terminate the AGP-73 agreement, citing multiple baseless complaints about the delivery of Autark’s work. This breach of contract was delivered seven weeks after Aragon stopped paying Autark, and one day before 87,500 ANT from AGP-19 was to vest. This notice finally conceded to the fact that a contract did exist, yet it did not provide 30 days to cure any alleged defects in performance, a term in the contract. By not vesting Autark's ANT, Autark was unable to have full voting power in the AGP that the Aragon Association proposed to cancel ANT holders voting rights.

In May 2020, in the course of settlement negotiations, Aragon initiates legal action against Autark in the Switzerland courts, demanding $50,000 in damages.

On 22 May 2020, Autark made a public statement about the Aragon Association's legal action filed against Autark.

On 22 May 2020, Aragon made a public statement in response to Autark's statement. In this public statement, Aragon claimed that they notified us of a breach of contract in January 2020. Yet they did not acknowledge the existence of a contract until 21 February 2020. In this statement, they additionally claimed one of the breach of contract reasons as “Breach of confidentiality (including defamation)”. Yet that reason was not included in the (only) breach of contract notice that Autark received on 21 February 2020.