Exclusive: Staff stage 'coup' at blockchain startup Nodal Labs

By Oliver Smith on 4th September 2019

FintechCrypto and Blockchain

Action taken after the London-based company reportedly failed to pay contractors and agency workers again last month.

Exclusive: Staff stage 'coup' at blockchain startup Nodal Labs
Image source: Oliver Hibbs-Brockway, Nodal CEO.

On Friday contracted staff and agency workers at blockchain startup Nodal Labs reportedly missed payroll for the third month running in some cases, several company insiders told AltFi.

Permanent staff were told last week that their payroll would be met, but one insider said it had been “down to the wire” as last-minute funding was eventually secured by CEO Oliver Hibbs-Brockway.

Now Nodal staff, including Chief Operating Officer Mark Williams, are attempting to wrest control of the company from Brockway and Director Barry Hudson.

In a comment sent to AltFi last night, Nodal said it had “never missed a payment run” to contractors and agency workers, and had “never missed its payroll obligations towards internal staff members”.

The £250m Minstrell contract

In March several publications, including AltFi, reported that Nodal, a London-based crypto startup, had signed a £250m contract with UK recruiter Minstrell Recruitment to provide “the infrastructure that brings together currently siloed systems related to its recruitment and HR,” as Brockway told AltFi at the time.

According to Companies House, Minstrell had a total turnover of less than £30m in 2017.

After the Minstrell deal was announced staff numbers at Nodal reportedly rose to more than 30 in the company's London office, along with a team of contracted developers who were hired overseas.

That figure has now fallen to around half a dozen permanent employees today.

Several former and current staff from Nodal Labs allege that at the time of the announcement the technology described in Nodal’s press release did not yet exist. As one former senior technology-focused employee put it “we didn’t have the product”.

Nodal’s original product strategy was focused on a two-way marketplace, with the company helping to place temporary workers in the creative industries and using a blockchain-powered platform to facilitate their contracts and payments.

The Minstrell project expanded this platform to include the whole gamut of talent sourcing and management on behalf of third-party recruiters, with Nodal now charging a fee for use of its technology.

Nodal told AltFi that at the time of the Minstrell announcement on 13 March: “The technology described in the press release was in existence and within the original Nodal product.”

On its current team size, Nodal said it is “constantly building a solid team of engineers, community managers, designers and support staff… some members of permanent full-time staff have moved to contract/freelance positions within the business as per our business model and others have left for personal reasons.”

M&C Saatchi and the ‘Bitcoin Barrister’

In February it was reported in the marketing trade press that London-listed communications agency M&C Saatchi had secured a £500,000 public relations brief from Nodal.

The brief was reported to include media relations, events, social media, content as well as “strategic counsel ahead of a planned ICO”.

During Brockway’s first meeting with Saatchi he was joined by Eitan Jankelewitz, a lawyer nicknamed the ‘Bitcoin Barrister’ by the Wall Street Journal due to his specialism in blockchain in the technology practice of London-based law firm Sheridans.

Nodal Labs also counted Jamie Smith, a partner at Sheridans law firm, on its board of directors until July according to Companies House.

Sheridans made headlines in 2014 as Britain’s first law firm to accept payment in Bitcoin.

AltFi understands the £500,000 public relations brief was scrapped by Saatchi in July, while the agency considered taking legal action against Nodal.

M&C Saatchi declined to comment on its relationship with Nodal.

Nodal Labs was founded by Oliver Hibbs-Brockway in 2017 and secured a £1.2m Series A funding from ABH Management LLP (of which Nodal's Barry Hudson is also a Director) in March.

Brockway was appointed as a Director of ABH on Companies House in March following the investment.

On the current leadership of the company and on AltFi's report that staff are trying to wrest control, Nodal denied the report and told AltFi it “has a strong, committed management team and decisions at board level are undertaken in the appropriate way.”

In the reporting of this story AltFi spoke to six current and former employees of Nodal Labs, as well as contractors, directors, and agency staff involved with Nodal over the course of several months, all of whom independently corroborated each other's claims.

Most asked to remain anonymous to protect their reputations.

Got a tip? Get in touch: Oliver@AltFi.Com