Varun Vummadi, the Co-founder and CEO of tech startup Giga, has alleged that the San Francisco-based company is facing an extortion attempt involving a demand of $3 million. He alleged that a “small group of individuals” has illegally obtained confidential company information and is using it to blackmail the firm.

‘Giga is being extorted for $3 mn’

“Giga is being extorted for $3Million, and we want to set the record straight,” he wrote on X (formerly Twitter), before addressing what he described as false allegations doing the rounds on social media. “They are being made by a small group of individuals who have illegally obtained confidential company information and are now attempting to extort and blackmail Giga,” Vummadi added. 

The IIT Kharagpur alum went on to call the claims being shared on X “false and defamatory”. 

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He alleged that the individuals behind the extortion have threatened to selectively release manipulated snippets of stolen data unless the company pays $3 million.

“Now they are threatening to take snippets of this data, manipulate it out of context, and release it to the public with wildly false and defamatory allegations unless we wire $3M to an anonymous crypto account,” he went on to say. 

Vummadi also shared a screenshot of an email he received demanding $3 million in cryptocurrency. The email, sent from a Proton Mail account, begins with: “One-time settlement 3 million in crypto. Everything would be over post that. This is the only place to communicate. First reveal is auto-scheduled to post in three days (26 Dec 9 AM PT). No extensions. Any smartness from your end results in earlier release.”

The email further included step-by-step instructions on how to purchase Bitcoin and convert it into Monero.  “Buy BTC from a company account, many start-ups now hold BTC, including Elon Musk through Tesla. Convert to XMR/monero totalling $ 3 million.”

It also suggested selling personal equity to raise funds and transferring the amount via cryptocurrency. The sender also instructed Vummadi to notify them once the funds were ready, after which they would share the wallet address for the transfer.

‘Send founders to jail, make Giga inaccessible’: Threat email

According to Vummadi, this was not the first such message. In an earlier email dated December 16, an anonymous group claimed its goal was to have both co-founders jailed, make Giga “untouchable for customers”, and force them to incur legal costs worth “10 times the value of the equities you stole from us”.

“…in legal costs, lawsuits, fines by regulatory investigation by FTC, SEC, DOJ, DHS, and lost business compared with the value of equities you stole from us,” it stated.

“The least painful scenario for you is returning what is rightfully ours; otherwise, suffer. Reveal will begin with the least damaging material and escalate to nuclear level impact (read: going to jail) from the 70 GB destruction stack,” the email read. 

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Vummadi said the law enforcement has been informed of the extortion attempt and that the company would pursue legal action if the threats continue. “Their emails sent from an anonymous Proton email account demonstrate their attempts to extort Giga,” it said in a December 25 statement. 

“We want to be clear that the false and defamatory allegations that these individuals have threatened to make public have nothing to do with our product and the way we are creating value for our customers. We are extremely proud of the company and the product we have built at Giga,” the statement read. 

The company further claimed that it continues to lead the market in AI support agents. It added, “We have built and are continuing to develop the best product by far in the market for building AI support agents in the world, which is why our customers have partnered with us. The truth is, we win on metrics. Our product speaks for itself.”

What are the allegations against Giga?

Jared Steele, Chief of Staff at Opal Exchange, has shared a screenshot he claims to have received from “a small army of people”.

Steele said that “Giga files are here” and claimed that former employees, contractors and personal connections had shared around 70 GB of documents and recordings.

This, according to him, contains “false revenue numbers, hiring of female workers in Dubai, bribing F500 co’s, listing fake customers, multiple false cap table claims (ex Sam Altman), not paying + cheating employees from equity, blackmailing customers for price increases”.

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The email also claimed that the US Securities and Exchange Commission could indict and subpoena the founders without notice, urging regulators to investigate the company for fraud.

“It’s now an open secret in Silicon Valley that their inflated revenue numbers are mostly a lie,” the email alleged, calling for subpoenas of internal dashboards, accounting software, sales decks, and cloud storage accounts.

“They lie to customers in internal sales decks. They also lie on sales calls about having customers they don’t really have.”

The email further said that Silicon Valley should have a zero-tolerance policy for fraud, adding, “They bulldozed over countless laws. They do the crime, now have to do the time.”

Steele is a former Giga employee

Interestingly enough, Steele was hired by Giga in April this year, but claims he resigned just a day after joining, citing multiple “red flags”. 

In an earlier post on X, Steele alleged discrepancies between internal dashboards and revenue claims, bait-and-switch tactics related to job title and compensation, and questionable internal remarks.

“When we hit $10m arr, we’re going to spend $100k on ____”(illegal stuff). We’re doing $____ in mrr” (Dashboards in the hq show 6x less). Bait and switch on title, start date, comp, etc,” Steele claimed in a post on X on November 6. 

He further said that while his time off for two international weddings had been pre-approved, he was told to pick “better friends” to attend just one wedding after he signed the contract. 

Steele further alleged that a remark made by the founder made him uncomfortable. “I chopped off a goat’s head in India because it brings good luck,” Steele quoted the founder as saying. 

Steele also claimed that the employees were expected to work seven days a week for 12 hours each day. “Pto policy is subject to change at our discretion… You are expected to always be working,” he claimed to have been told. 

“First day of work, I got in early. The founder walks in my direction, and I stand up, extend my hand for a handshake. He snubs me – not even an acknowledgement. I just moved my entire life & drove 26 hours across the country & not even a ‘welcome to the team’ or a hello. Easiest decision of my life to quit after first day,” Steele further alleged. 

According to its LinkedIn page, Giga builds and deploys AI support agents for the largest B2C companies in the world. “Enterprises like DoorDash trust Giga with their most complex support and operations problems, dramatically improving their resolution rate while also accelerating their operations roadmap from years to months. Our mission is to reprogram each of the world’s largest companies using AI, reaching every person on Earth,” it added.