Major Fallout: NFT Founder Jonathan Mills Faces Fraud Allegations Over Multi-Million Dollar Scheme

A significant legal battle is unfolding in the NFT space, with multiple investors launching claims against Jonathan Mills, the founder behind the Hashling NFT project. According to a court filing in Illinois dated May 14, investors are alleging that Mills orchestrated an elaborate scheme to divert substantial funds from both the NFT initiative and an associated Bitcoin mining operation into a personal holding company.

The Alleged Scheme

The accusations center on Mills’ transfer of assets from Hashling NFT and approximately $3 million from a Bitcoin mining venture into Satoshi Labs LLC (previously known as Proof of Work Labs LLC), where Mills holds founder and CEO positions. Investors claim Mills misled them regarding these asset movements and have filed suit alleging fraud and breach of fiduciary duty.

The financial scale of the dispute is substantial: plaintiffs assert they collectively raised $1.46 million through two separate NFT drops deployed on both the Solana and Bitcoin blockchains. Despite these contributions, the investors maintain they have received zero returns on their capital and no promised equity dividends.

Structural Deception Allegations

One of the most striking claims involves the shareholder agreement structure. According to court documents, Mills granted himself a controlling 67% equity stake in Proof of Work Labs, while individual investors who contributed up to $20,000 each received only 2% stakes. The plaintiffs contend this agreement was deliberately constructed with inconsistencies to obscure Mills’ control and mislead investors about the arrangement’s legitimacy.

Additionally, Mills held 67% of all voting power on company matters, leaving no other partner with meaningful decision-making authority despite their capital commitments.

Project Origins and Early Development

The Hashling NFT initiative emerged from conversations between Mills and Dustin Steerman, a previous collaborator. While Mills initially acknowledged lacking both financial resources and NFT expertise to Steerman, the two proceeded regardless. Attorney Clinton Ind of Ind Legal Group LLC noted that Mills’ apparent determination helped catalyze investor confidence in the early phase.

To scale operations, Mills and Steerman recruited additional investors to handle NFT design, social media promotion, and industry networking at major conferences including New York-based NFT events. Mills reportedly also involved his girlfriend in the project’s operations.

Legal Actions and Demands

Beyond fraud and fiduciary breach allegations, investors are pursuing a constructive trust order over project assets and seeking full financial restitution. At the time of reporting, Mills had not responded to requests for comment on the accusations.

This case highlights ongoing risks within the NFT ecosystem where governance structures and investor protections remain inconsistently applied across projects.