I've been letting this one simmer a bit today to see what other details pop up, and unfortunately, the situation seems to have only gotten more confusing and sordid.
Long story short, Tiny Metal dev Hiroaki Yura has been accused of using funds from another Kickstarter project to bring Tiny Metal to life. The funds supposedly come from Project Phoenix, a Kickstarter project that raised over a million dollars. As expected, Yura says this isn't the case at all.
The one making the accusations is Tariq Lacy, someone who worked on Tiny Metal for a couple of months. Yura says that Lacy was terminated due to sexual harassment issues with female staffers.
As you can see, it's a case of he said, she said. There's no clear-cut answer right now, and unfortunately, Tiny Metal hangs in the balance of it all.