Thetacoin faces new controversy, legal tensions rise

Over the years, the crypto sector has frequently featured legal news stories focused on cases being dismissed or investigations ending without results. But recently, high-profile lawsuits involving prominent altcoins have surfaced, raising tensions with serious accusations. Uniquely, the lawsuit was brought by a former company employee, rather than by regulators or investors, which gives the claims more weight.

What are the charges against Sita?

Two former Theta Labs employees raise serious charges in a legal complaint filed in California Superior Court, Los Angeles County. They allege that Theta Labs CEO Mitchell Liu engaged in deceptive practices to artificially inflate the value of his company’s cryptocurrency products. Some of these allegations include false collaborations with major Hollywood studios and celebrities such as Katy Perry, aimed at boosting the project’s profile.

The serious nature of these insider allegations may prompt further evidence gathering against Theta, which could have a negative impact on the organization. Thetacoin’s price has been relatively stable so far, but ongoing legal activity could start to put pressure on its value.

Will Theta Coin upgrades offset the legal issues?

Coincidentally, on the day the lawsuit was filed, Theta Network rolled out an upgrade to EdgeCloud. This notable infrastructure improvement includes NVIDIA H200 GPUs available at existing pricing, promising faster AI training speeds and greater efficiency for developers leveraging the platform. With the support of corporate validators such as Sony Europe, Theta continues to drive advancements in distributed streaming and edge computing.

December 16th brought mixed fortunes for Theta, with minimal changes in the currency’s value, remaining above the $0.317 support level.

Examining the historical price movements of Thetacoin, we find that it has struggled to maintain its peak in 2024, failing to maintain a consistent value above $1.03. Although it soared above $3 a year ago, the altcoin hit a low of $0.2 by October 2025, a level last seen in September 2020.

If this litigation starts to negatively impact Theta’s market performance, or if the overall market turns into a sell-off, Theta could test the 2020 support level at $0.118.

“Theta Network’s recent infrastructure improvements reflect our continued commitment to innovation that enhances our edge computing capabilities,” company representatives commented.

Thetacoin is in a precarious position, caught between legal battles and technological advances. As the litigation unfolds, its impact on cryptocurrencies’ position in the market will become clearer and may guide the next strategic actions of those involved.