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Sacked co-founder Sønstebø sharply criticizes IOTA Foundation

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  • After being kicked out of the IOTA Foundation, David Sønstebø gives his perspective on the events.
  • Sønstebø criticizes the governance and funding of the IOTA Foundation and attacks co-founder Dominik Schiener.

After the IOTA Foundation parted ways with its co-founder David Sønstebø about two weeks ago, the latter has now spoken out. Instead of a hate tirade and wild accusations, Sønstebø praises the project and the progress. At the same time, however, he cannot refrain from criticizing individual decisions and other personalities of the IOTA Foundation.

Presentation of the IOTA Foundation was dubious and defamatory

As Sønstebø writes, he decided to wait to describe his views so as not to overshadow “the significant milestone of the launch of the Chrysalis / IOTA 1.5 test network.” In his letter to the IOTA community, Sønstebø also makes it clear that he continues to believe in IOTA as a project with full conviction.

What was unfortunate from Sønstebø’s perspective, however, was the communication surrounding the decision that affected him. Thus, there was a “seemingly Kafkaesque development, which has led to asinine speculation both in the community and media.”

Sønstebø calls the board’s handling of his personnel matter “clumsy, panicky and downright unprofessional,” which subsequently left plenty of room for speculation. In particular, he also regrets that no joint statement was issued by the foundation and himself, setting out both perspectives. In this sense, Sønstebø also describes the official reasoning for his departure as false:

I categorically reject this blatantly false, dubiously motivated and defamatory depiction of my person. I founded the project, raised the capital for the Foundation, built the initial team, single-handedly selected and empowered every current Board member and have never taken a single cent in compensation. Rather, in context, the truth is that if forced, my number one allegiance is to IOTA.

Criticism on the IOTA Foundation’s funding and governance

However, Sønstebø was harshly critical not only of the communication surrounding his dismissal, but also of the governance and funding of the IOTA Foundation. According to the IOTA co-founder, the foundation suffers from “founderitis,” which is why he called for the hiring of a CEO/COO back in mid-2018.

Despite consensus, this was chronically deprioritized until I again raised the alarm in 2020, this time escalating it to the Supervisory Board, which sided with my stance. Regrettably and inexplicably, the Board repeatedly resisted this, despite me even naming a promising prospect from within IF. Unfortunately, this meant that the maturation of the Board was hampered.

The consequence of this neglect, says Sønstebø, was that “the constant drama from the past resurfaced and IF suffering misalignment and delays repeatedly.” A major point of contention, he added, has also been funding. While Sønstebø emphasized that the IOTA Foundation is not on the verge of bankruptcy, he still sees lapses in the way the financial planning was handled:

When you have over 100 talented and devoted people depending on IF’s finances for their livelihood, winging it is not acceptable. This would evolve into the last major confrontation in the Board […].

It is also a mistake, according to Sønstebø, to place any projects with the IOTA Foundation. This not only hurts the finances, but also the ecosystem, as it contradicts the ethos of IOTA.

I rather that IOTA actually succeed than it simply becoming a vehicle for a centralized German organization with multiple subsidiaries wholly-owned by it to grow indefinitely. Hornet, Iot2tangle, Society2 etc. etc. are successful examples of this vision that has always been instrumental to IOTA’s vision. These principles are instrinsic to IOTA’s success and cannot merely be empty platitudes.

Dominik Schiener is not a “co-founder” of IOTA

At last, Sønstebø also commented on his former colleagues on the IOTA Foundation board. While Navin Ramachandran, Serguei Popov, Richard Soley and Clint Walker receive largely laudatory words, Sønstebø attacked his longtime companion Dominik Schiener, calling on him to refrain from using the term “co-founder.”

When I got to know you, you were a young flailing entrepreneur hating your life in Südtirol. I took a chance with you and, for the most part, don’t regret giving it to you. We had good times. You have played an important role in the Foundation and been the fellow Board member I have worked with the most. Then shit happened. I will refrain from sharing unsavory details, you know, to return the favor of “respecting privacy”.

I will however, demand that you no longer refer to yourself as a co-founder of IOTA since you had no part in its founding. You were never involved in either developing the theory of the Tangle or the IOTA vision. […] I brought you into the project well over a year after its inception; it’s time people know the truth.

Check out this link for David Sønstebø’s full statement.

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