Russian stole the code and sabotaged a startup for partners from Ukraine

Andriy Khvetkevych, co-founder of NIC.UA, and several other partners launched a project called NFT Patent. Over time, one of the partners, a Russian called Pavel Vinnitskiy, began to demand the role of CEO, and, after being refused, he stole the project code and now is trying to launch a pirate copy of it. This situation has made it almost impossible to find investors for the startup. AIN.Capital spoke to Andriy Khvetkevych about the details of this story.

The launch of the project

In the second and third quarters of 2022, Andriy Khvetkevych and his partners launched NFT Patent, a Web3 solution for registering intellectual property rights. In the spring of 2022, they created an MVP and started looking for investments, communicated with investors, and attended conferences (for example, WebSummit) to attract customers. Initially, they tried to raise $1 million, then reduced the amount to $750,000.

NFT Patent -3
Photo from Andriy Khvetkevych’s Facebook.

“The founders included me, our CTO from Ukraine, and Pavel Vinnitskiy, a Russian who had been living outside Russia for ten years. At that time, we still believed in “good Russians” and did not see any risks. During the negotiations, some investors told us, ‘You have a co-founder with a Russian passport—that’s a risk.’ We should have recognized this red flag back then,” Khvetkevych recalls.

According to Khvetkevych, initially, Vinnitskiy initially worked on marketing and showed good results. But, when the team started looking for investors, they encountered difficulties.

For example, Pavel fired the project’s designer without consulting the rest of the founders. He started pressurising the team, saying they weren’t doing enough work or trying hard enough. And finally, he demanded that the author of the NFT Patent idea, Andriy Khvetkevych, give him the role of CEO. Vinnitskiy was told the conditions for becoming CEO: for example, to generate investment in the project or bring in five large b2b clients. But he refused to follow these conditions and left the team a couple of weeks later.

He also copied the project code from the repository on GitLab and deleted all project documents from the corporate Google Workspace account—all presentations and other materials (later copies were recovered). Up to then, according to Khvetkevych, everything had been fine in the relationship with Pavel, and there were no grounds for any conflict.

NFT Patent -2

“We had a document on the rights and obligations of co-founders prepared and proofread, but at that time, we hadn’t had time to sign it yet. But in any case, if the work is performed as part of a project and paid for (even with the company’s shares), from the point of view of international law, it is work for hire, and the rights to the results of this work belong to the company,” Khvetkevych says.

NFT Patent -1
Data from the administrator about copying the project code: all repositories available for the account were downloaded directly from the browser

Later, the NFT Patent team found out that Pavel was pitching his new project to investors. It was called Synexis and was fully copied from NFT Patent. After leaving the company, Vinnitskiy also sent his former partners a list of investors with whom he “forbade them to communicate,” saying they were people from his network and he would work with them.

After consulting with lawyers, the NFT Patent team prepared and sent a letter to investors warning them about Pavel’s actions and behavior. “We decided to write to the investors we communicate with to inform them that the person actually stole our project. And that he is now trying to create a company that is completely copied from ours,” the CEO says.

What’s going on with the startup now

After that, the NFT Patent team decided that none of the investors would support a project with such a history and did something different. Now, NIC.UA is engaged in a project aimed at exporting its services to the United States and is launching a new domain registrar, NicNames Inc. This company acquired NFT Patent (at that time, already NFT Copyright) from the co-founders for $250,000. It integrates these solutions into its service. Thus, all NicNames customers will have access to copyright registration technologies.

As for the response to Pavel’s actions, Khvetkevych notes that if he launches a project identical to NFT Patent, the team is ready to go to court.