We have an unparalleled blockchain and digital asset litigation and regulatory practice. Our experience in litigation, regulatory investigations defense, and counseling gives us deep and diverse perspectives on the ever-changing regulatory and technological crypto environment. Our client base includes blockchain platform companies; layer one developers; leading digital asset venture and investment funds; digital asset exchanges; digital asset companies with regulated custodial services; digital asset financial services companies; founders of and investors in digital asset companies; artists, IP holders, and collectors in the NFT space; more traditional tech companies acting in the space; and cryptocurrency miners. We have guided clients to successful resolution of pre-litigation disputes, victories in public litigation and private arbitrations, and successful outcomes in government and regulatory investigations and enforcement actions. We advise clients in how to structure their business to avoid or mitigate regulatory and litigation risk.
We advise clients regarding the distinctive issues the digital asset industry faces – driven by the incredible innovations the blockchain revolution creates every day. We see regulators stretching to try to apply old-world rules to cutting edge platforms and projects. Companies struggle to address the tension between pure decentralization and the support necessary to enable a project to succeed, knowing that the chosen balance point may impact regulatory investigations and potential civil liability. We see developers writing smart contracts that ostensibly establish a complete set of rules making source code the definitive law -- “code is law” -- only to later discover that gaps need to be filled, or a glitch creates unintended consequences. We see well-intentioned developers facing potential liability for bugs in code they have contributed to public blockchains that the developers do not own. Artists seek to protect their intellectual property rights from unscrupulous NFT minters, while innovators seek to turn NFTs into bundles of rights that go well beyond simply collectable images. DAOs (decentralized autonomous organization), which have been around for some years, are now viewed as a potentially revolutionary way to organize in a decentralized way. But the legal implications of those organizations – for example, the potential liability of members for the acts of the organization – is presently unclear. DeFi (decentralized finance) is overtaking large swaths of activity traditionally carried out by centralized and highly-regulated entities, and regulators are scrambling to inject controls into the space. The list goes on and on, with new issues emerging all the time.
Of course, many legal issues we see are similar to what we see in other developing tech areas – such as founders’ disputes; employment and equity compensation disputes; tortious interference between competitors; breach of contract cases; acquisition and spinoff-related disputes; traditional IP battles; and early-stage investor disputes. We have litigated them all.
We stand ready to bring our substantial experience, knowledge, and success rate to help those in the digital asset industry navigate these and other issues. Our digital asset practice leaders include individuals with extensive trial, regulatory, and white collar experience, and deep knowledge of digital assets. For example, Dave Grable is a former federal prosecutor who has litigated numerous significant, high-stakes claims involving digital asset companies, in public litigation and private arbitrations where the amounts at stake have reached into the 11-figure range; Michael Liftik is the former Deputy Chief of Staff at the SEC, where he helped develop the agency’s earliest policy responses to digital assets, and who has represented many companies and individuals in ongoing SEC and CFTC digital asset investigations and private securities class action litigation; Katherine Lemire is the former Executive Deputy Superintendent of the New York State Department of Financial Services, where she oversaw all investigations and enforcement actions into virtual currency businesses and served as a member of the Virtual Currency Licensing Committee; and Alex Spiro is a former prosecutor who specializes in white collar crime and an array of complex issues in a wide range of industries. Many other firm lawyers have expertise relevant to digital assets, both on the regulatory side and in civil disputes.
Our digital asset practice can help you or your company stay on the right side of the emerging law. As the world’s best and most feared trial lawyers, we are ready to handle the broad spectrum of issues that you and your company face.
- We represented Ripple Labs in completely defeating a $175 million case brought by UK-based Tetragon Financial Group in Delaware Chancery Court. Tetragon claimed default under a Ripple shareholder agreement based on the SEC’s filing of a lawsuit against Ripple in December 2020. The Court denied Tetragon’s preliminary injunction motion, granted Ripple’s summary judgment motion, and ordered Tetragon to pay well over $3 million in fees to Ripple.
- We have represented several digital asset platforms, a cryptocurrency investor, and a cryptocurrency start-up CEO in separate SEC investigations regarding compliance with registration provisions and other aspects of the federal securities laws. We achieved a rare “closing letter” for an ICO token issuer.
- We secured a complete dismissal of all claims against BProtocol Foundation and its founders in a class action securities lawsuit seeking over $100m in rescission for the alleged issuance of unregistered securities. The resultant decision, Holsworth v. BProtocol Found., No. 20 CIV. 2810 (AKH), 2021 WL 706549 (S.D.N.Y. Feb. 22, 2021), makes important new law regarding the high threshold to hold crypto token issuers liable for soliciting purchases on secondary market exchanges, the challenges to rescission claims against token issuers, and the applicability to crypto trading of Morrison’s bar against adjudicating foreign transactions in the U.S.
- We are representing the venture arm of a major asset manager and a separate venture capital firm in several SEC investigations into various crypto companies in which these funds have invested.
- We are representing Dfinity in federal and state class actions alleging the blockchain token is a security.
- We are representing BitGo Holdings, Inc., a technology company that established the first independent, regulated custodial business for digital assets, in Delaware Chancery Court against Galaxy Digital Holdings, a provider of financial services in the cryptocurrency sector, seeking damages related to Galaxy’s repudiation of the parties‘ merger agreement.
- We are representing a significant layer one blockchain company in assessing and mitigating regulatory risks in its business model, fundraising and on-going activities.
- We are representing a defi stablecoin platform in a state class action alleging violations of the registration provisions of the federal securities laws.
- We are representing a layer one company in a pre-litigation investigation and dispute with former software engineers who went rogue and undertook actions to jeopardize the security of the blockchain technology before trying to start a competitive company.
- We are representing a major IP holder on an NFT deal and project that will go far beyond simple images and create membership and other rights.
- We are representing a managing partner in a crypto investment fund in an ownership and related dispute with his partner.
- We are representing multiple early-stage layer one companies in disputes with individuals claiming founder’s status.
- We are representing a digital asset platform in a potential business dispute concerning copyright infringement and unfair business practices.
- We represent Civic and Quantstamp, as well as various individuals, in pending civil litigations similar to the BProtocol class action that likewise seek damages and rescission for the alleged issuance of unregistered securities.
- We represent Rothesay in litigation over the ownership of a cryptocurrency-enabled sports betting enterprise and related intellectual property and trademarks.
- We represent a large number of stakeholders and bondholders of Wirecard AG, one of the most prominent issuers of cryptocurrency debit cards, in pending insolvency proceedings involving the company.
- We represented Ripple in civil litigation involving fraud and breach of contract claims related to multiple agreements, including an option grant for 5 billion units of the cryptocurrency XRP.
- We defended org on a trademark infringement claim by BitVault, Inc. involving the Gems cryptocurrency and protocol for microtasking using the Ethereum blockchain.
- We obtained a preliminary injunction on behalf of Alibaba Group Holding Limited to prevent trademark infringement by a foreign cryptocurrency issuer and promoter. It is one of the first such victories in the blockchain/cryptocurrency field anywhere in the United States, and the first by a major Chinese technology company.
- We represent a major fintech company in private arbitration proceedings in the United States and Singapore involving trademark and other disputes and relating to the cryptocurrency sector.
- We represent a major fintech company in multiple confidential arbitrations involving cryptocurrency-related disputes.
- We represent a confidential whistleblower who uncovered fraud in an initial token offering.
- We commenced Delaware proceedings and utilized subpoena powers to trace and recover funds stolen from a cryptocurrency investor by a hacker, successfully identifying the hacker in this process.
- We advised a multinational cryptocurrency mining company on the UK AML risks of cryptocurrency mining.
- We advised a major cryptocurrency mining company regarding patent law and intellectual property matters.
- We advised token purchasers regarding their rights under token grant and SAFT agreements.
- We advised a cryptocurrency-focused hedge fund on potential dispute risks in connection with the restructuring of debt denominated in cryptocurrency and governed by foreign law.
- We advised an employee and shareholder of a cryptocurrency exchange regarding share valuation, employment law issues, and a CFTC investigation of currency manipulation.