A pharmaceutical firm is suing stablecoin provider Circle and demanding a refund after its CEO “accidentally destroyed” $1 million worth of USDC by sending it to the wrong wallet address. 

CelaCare filed the lawsuit in a Massachusetts district court this week that claims the USDC was “permanently destroyed” after its CEO, Kenneth Yates, entered the wrong Ethereum wallet address. 

The USDC was sent from CelaCare’s Coinbase account to a contract counterparty on July 3, 2024. The lawsuit claims, “When Yates used his computer to copy the destination address from a document sent to him by the counterparty, Yates’s computer erroneously transcribed a B as ‘8’.” This transcription error seems to have arisen as the CelaCare CEO attempted to copy and paste the address from a PDF and failed to verify the results.

As a result, CelaCare claims that Yates sent the crypto to an inaccessible wallet address that has no owner. In order to convince itself that the funds were truly inaccessible, it sent a message to the address which reads, “On July 3, 2024, Celacare Technologies Inc. sent one million USDC to this address erroneously. If you have the private key to this wallet address, please send 1.46 USDC to any address and contact us at charlie@gerstein-harrow.com.” It did not receive a response. CelaCare argues this renders the USDC destroyed. 

Read more: OpenSea hit with Wells notice, says SEC lawsuit will ‘misinterpret law’

It says that Circle should refund the crypto as the firm’s USDC stablecoin is classed as a “financial asset” while Coinbase is classed as a “securities intermediary” under the Uniform Commercial Code (UCC). Because of this distinction, CelaCare claims the UCC legally requires Circle to either reissue the funds, or “honor them.” 

The firm wrote to Circle on August 15 with the drafted lawsuit attached and asked Circle to return the funds. However, on September 6, Circle’s counsel refused CelaCare’s refund request.

Celacare is seeking a trial by jury and wants the court to declare that the USDC was destroyed. It wants to receive $1 million, either in USDC or fiat, or issue Circle the same $1 million value in damages.

Tether, the largest USD-backed stablecoin, offers a token recovery service where it will (at its discretion) burn and re-issue tokens in cases like this for a 10% fee.

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A lawsuit brought against former Binance CEO, Changpeng Zhao by three crypto investors who accuse the exchange of losing their funds through lax money laundering regulations, may put the “efficacy of blockchain analytics itself,” on trial.

This is according to Bill Hughes, Senior Counsel and Director of Global Regulatory Matters at Consensys, who also branded the suit’s key allegations as “dubious.”

Read more: Has CZ followed a Solana news account while in prison?

The lawsuit, which was filed on August 16 in the Western District Court Of Washington, accuses Binance and Zhao of “offering bad actors a way to remove the connection between the ledger and their digital assets so the digital assets would no longer be traceable.” 

It also claims that Binance’s failure to implement and maintain effective anti-money laundering (AML) and know-your-customer (KYC) rules allowed criminals to move stolen funds to Binance so it could be laundered covertly.

It said that a “core attribute” of cryptocurrency should entail, “a permanent record of those transactions on the public blockchain and the chain-of-title of cryptocurrency is permanently and accurately traceable on the blockchain.”

According to Hughes, if the lawsuit goes onto discovery, and even dispositive pre-trial motions, “then the efficacy of blockchain analytics itself and on-chain asset recovery will be on trial!”

Read more: When is Binance founder CZ coming out of prison?

Binance lawsuit lawyers smell “blood in the water”

Hughes also highlighted the impressive credentials of the lawyers backing the lawsuit. “They have represented classes suing Facebook over consumer privacy violations, opioid manufacturers over… well… opioids, and Wells Fargo over fraudulent accounts. Their pockets are deep and they smell the blood in the water,” he said.

The three plaintiffs are launching the suit on their own behalf and for any other person or entity who lost their stolen crypto before it was moved to Binance. Between the three of them, over $1.5 million was stolen and sent to an account on Binance. The suit seeks trial by jury. 

Zhao is scheduled to be released from jail on September 29. He pleaded guilty to charges relating to the violation of the Bank Secrecy Act and money laundering laws and was given a four-month sentence. He has paid a $50 million fine while Binance paid $4.3 billion.

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A judge has ordered both FTX and its sister trading firm Alameda Research to pay out $12.7 billion to creditors following the conclusion of a Commodity Futures Trading Commission (CFTC) lawsuit.

In an August 7 filing, New York district judge Peter Castel ruled that both collapsed crypto firms should pay a disgorgement of $8.7 billion to the victims who lost out, and $4 billion to cover the profits they made during all of their violations. 

Defendants, including FTX, Alameda, Caroline Ellison, Sam Bankman-Fried, Gary Wang, and any of their affiliates, are, according to yesterday’s consent order, also prohibited from trading any digital asset commodities, including, bitcoin, ether, and tether. They are also banned from acting as market intermediaries.

Read more: FTX-claims broker embezzled millions to spend on jewelry, art, and luxury hotels

FTX and Alameda had both agreed with the CFTC back in July to pay the billion-dollar settlement. However, this agreement was subject to yesterday’s court verdict.

It marks the end of a 20-month-long lawsuit from the CFTC that was filed in December 2022.

FTX collapsed and declared bankruptcy in November of that year after it was discovered to have misappropriated billions of dollars of funds. Its former CEO, Bankman-Fried, was sentenced to 25 years in prison this year for charges including wire fraud, conspiracy to commit fraud, and money laundering conspiracy.

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Ethereum co-founder Steven Nerayoff has filed a lawsuit seeking $10 million from a crypto analyst who accused him of being an extortionist and government plant that aided an assassination attempt against him. 

Nerayoff filed the defamation lawsuit in a New York District court yesterday against crypto analyst Truth Labs, real name Tyler Fayard. 

He claims Fayard made multiple false allegations against him, calling him a criminal and ‘inhumane fraud’ on X (formerly Twitter) over the past few months. In one instance Fayard implied Nerayoff had taken part in an assassination attempt against him during a running race.

Fayard posted, “Two days after I tweeted the below Tweet about Peter Pablo, an assassination attempt on me took place while running in a Marathon. I only told one other person, @StevenNerayoff, that I would be running in that Marathon.” 

Read more: Scoop: Justin Sun falsely claimed diplomatic immunity in lawsuit

As a result of the allegations, Nerayoff says Fayard has caused “emotional, mental, and economic harm,” and is seeking a minimum of $10 million in punitive damages against Fayard.  

He also wants an injunction, “actual, compensatory and consequential” damages against Fayard “not less than $10,000,000 per occurrence,” and a trial by jury. 

Nerayoff and Truth Labs previously worked together

Nerayoff was arrested by the FBI and charged with extortion in 2019 for his work on the Storm X ICO. The government, however, dropped these charges in March 2023. Both Nerayoff and Fayard then began working together to determine if Nerayoff’s previous charges were filed maliciously.

This lasted for several months until the alleged defamatory comments were made by Fayard. Nerayoff denies all of the allegations, including those about him being a government agent or having been ‘inserted’ into Fayard’s life. 

Following the lawsuit, Nerayoff posted, “It is time to draw a line in the sand. The moment has arrived to unmask the anonymous false prophets who thrive on fabricated stories to raise their own profile. Consequences for defamation apply in the digital realm.”

We have reached out to Tyler Fayard for comment on the lawsuit. 

Update July 23, 15:40 UTC: Updated cover image for clarity

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Binance Smart Chain’s ‘biggest’ NFT artist is suing Elon Musk’s X Corp after the social media giant suspended his accounts, allegedly ignoring its own policy and costing him his livelihood.

Jeremy Ryan, aka ‘NFT Demon,’ filed a lawsuit in California on Wednesday in which he accuses X (formerly Twitter) of unfairly suspending his seven accounts and ‘severely’ damaging his crypto and NFT businesses. 

Ryan, who became an NFT artist after surviving brain cancer, says his record of minted art makes him the largest NFT artist on the Binance Smart Chain. His work has attracted support from numerous celebrities including John Cena and Snoop Dogg.

However, he argues that being cut off from his accounts means he has “lost his predominant source of income and livelihood,” and that he is losing future profits that could be made if he was still active on X promoting his NFT work.     

The lawsuit calls X’s content moderation policies “inconsistent and arbitrary” and claims that his suspension was “without any proper explanation or justifiable reason.” Ryan submitted 13 appeals for his NFT Demon account without receiving a response from X. 

The suit reads, “X has a pattern of unexpectedly suspending cryptocurrency and NFT-related accounts with no explanation and some of these accounts are coins that Mr. Musk has personally purported to take an interest.”

The lawsuit also details a long list of free speech statements from Musk before arguing that the CEO and his platform repeatedly go against their official policy on content moderation.

Read more: Insider trading lawsuit: Here’s how much Elon Musk pumped DOGE

“Despite the platform’s announced commitment to ‘defending and respecting the user’s voice’ as one of its core values, it has repeatedly engaged in behavior contrary to this core value to the detriment of Plaintiff Jeremy Ryan,” the lawsuit reads.

Overall Ryan has made eight legal claims against X Corp, including breach of contract, unjust enrichment, promissory fraud, false advertising, and unfair business practices. NFT Demon is seeking damages in excess of $75,000 and a trial by jury. 

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Ontario’s superior court has green-lit a class action lawsuit against Binance that accuses the crypto exchange of selling unregistered crypto derivative products and violating securities law. 

The lawsuit, brought by Christopher Lochan and Jeremy Leeder, claims that Binance sold crypto-derivative products to thousands of retail traders while failing to register with the Ontario Securities Commission, as required by law. 

As reported by Advisor.ca, the lawsuit received a certification of motion on April 19 allowing it to proceed as a ‘class action’ lawsuit and represent a wide basis of people without each individual having to take legal action.

Judge E.M. Morgan noted that Lochan and Leeder claim “they are two of the tens of thousands of Canadian users of the Binance website who invested in cryptocurrency products and who claim that those products were sold by the Defendants illegally.”

Read more: Binance and CZ plead guilty but SEC lawsuit remains

When approving the lawsuit, the judge noted, “The plaintiffs have met the evidentiary burden on them of establishing some basis in fact that the issues raised in the four liability questions are common across the class.”

The plaintiffs are seeking damages for the crypto trades that took place and the rescission of their contract with Binance. Binance argued rescission was not appropriate as it claimed it was a third party to these transactions. 

The court, however, rejected Binance’s argument and noted that it couldn’t provide any relevant contracts supporting its theory.

The Judge said, “One would think that if it is the defendants’ view that Binance website users contract with each other and that Binance is only a medium for these contracts, then they could produce at least one such contract.”

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Google has filed a lawsuit accusing two China-based app developers of using its Play Store to host 87 investment and crypto scam trading apps that have allegedly defrauded more than 100,000 people.

The internet giant claims the two developers, Yunfeng Sun and Hongnam Cheung, stole anywhere between $100 and tens of thousands of dollars from individual victims. As a result, Google claims that investigating the pair cost it $75,000. 

It also reportedly claims the lawsuit is the first of its kind against alleged crypto scammers, with its general counsel saying, “This litigation is a critical step in holding these bad actors accountable and sending a clear message that we will aggressively pursue those who seek to take advantage of our users.” 

The developers had apparently been using the Play Store since 2019 to host crypto and investment apps that faked users’ returns while stealing deposited funds. They are also accused of attempting to extort victims with overpriced withdrawal fees. 

Read more: Fake crypto wallet in App Store for four years drained $120K in Stacks

In doing so, Google claims the two persistently uploaded new apps whenever one was suspended by hiding their identities and making ‘material misrepresentations’ to circumvent its policies. They are also accused of using YouTube, text message campaigns, and paid adverts to promote the fraudulent apps. 

Google has demanded a trial by jury in today’s lawsuit. It accused the defendants of violating the Racketeer Influenced and Corrupt Organizations Act (RICO) and breaching contract terms of various Google services, such as YouTube and its developer program. 

Google was almost taken to court when an Irish politician threatened legal action over a series of crypto scams that fraudulently misrepresented him. Google was ordered to hand over identifying information of the scammers and the two settled out of court.

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Binance US reportedly cut more than 200 jobs last year after it was dealt a ‘near-mortal blow’ when a Securities and Exchange Commission (SEC) lawsuit accused it of wash trading, diverting regulatory attention, and offering unregistered securities. 

In the wake of the lawsuit, the company reportedly suffered a 75% plunge in revenue and is struggling to find new banking partners after losing two already. In addition, the exchange reportedly has fewer than five market makers after previously being partnered with 20.  

The revelations were revealed in a deposition shared on Tuesday in which Christopher Blodgett, the COO of Binance.US arm BAM trading, is recorded giving witness statements.

Blodgett admitted, “Our trading volumes and business more generally have imploded,” and claimed the SEC lawsuit has, “At the highest level… dealt an almost near-mortal blow.”  

“Allegations of the SEC severely undermined institutional trust in our platform,” Blodgett added, noting that reviews citing the SEC accuse Binance of misusing funds and being a bad actor.

In June last year, Binance, under former chief exec Changpeng Zhao, was accused by the SEC and US Justice Department of breaking US securities laws. Binance reached a $4.3 billion settlement with the Justice Department in November but is attempting to dismiss the SEC’s lawsuit.

Read more: A complete timeline of Binance and CZ’s tumultuous 2023

Attorneys for the SEC also accused Binance US of not complying with the regulator on Tuesday. In the legal filing, attorneys claimed that Binance has failed to provide requested discovery material and is inadequately answering questions. Binance.US claims it has “complied with its obligations.” 

Uzbekistan also sued Binance after it failed to pay an $8,000 fine. It was also reportedly slapped with a fine of $10 billion from Nigeria but the government official behind that announcement has since disputed the figure.

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An alleged Ponzi scheme operator who reportedly funneled $4 million of his illicit earnings to Ontario’s self-proclaimed ‘Crypto King’ has been hit with an arrest warrant after he failed to hand over his passport while claiming to be in Dubai.

As reported by CTV, an Ontario judge found Ryan Rumble in contempt of court after he failed to hand over his passport by Dec 1 as ordered. He appeared virtually in the hearings and claimed to be in Dubai.

Rumble is facing a civil lawsuit accusing him of taking $14 million from investors in a Ponzi scheme and giving millions to ‘Crypto King’ Aiden Pleterksi. Pleterski is continuing to travel and gamble online despite facing a $40 million bankruptcy case.

Rumble reportedly said he could only pay his investors back by finding work in Dubai and claims to have secured a consultancy contract with a firm currently funding his stay. However, fraud litigators say there’s no evidence it’s a legitimate contract. 

Read more: Duped investors of Ontario ‘crypto king’ cause mansion sale reversal

Rumble apparently took offense to being deemed a flight risk by litigators, saying, “This is a civil matter, I haven’t done anything criminally wrong to anybody.”

A whistleblower who filed the initial complaint against Rumble’s company, Banknote Capital, reportedly witnessed a slide deck, seen by CTV, revealing that the company had $100 million plus in current assets under management. Rumble claims he can’t remember how the company came up with the funds. 

A 31-year-old mother joining the lawsuit told CTV that the warrant “helps to give us reassurance in the justice system that he won’t be able to run around the world with zero repercussions like Pleterski has.” She added, “Our fear would be that he’s over there and he’s dissipating assets.”

The court has ordered a province-wide arrest warrant for Rumble, and police have been asked to go to his house as soon as possible and arrest him if he’s present.  

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Canadian NBA basketball star Shai Gilgeous-Alexander has won a lawsuit reversing his purchase of an $8.4 million mansion after threatening strangers kept visiting the property looking for its previous tenant: Ontario’s self-proclaimed ‘crypto king.’

Gilgeous-Alexander filed the lawsuit earlier this year. He claimed the estate agents had misrepresented the property as “private and secure” and failed to disclose a “safety risk.” The pro-athlete claimed strangers threatened to burn down the property, attempted to break in, and bothered owners in pursuit of ‘crypto king’ Aiden Pleterski.

Gilgeous-Alexander won the lawsuit on November 27. According to the judge, “[The seller] suppressed the truth about the Burlington property, which in this case amounted to a fraudulent misrepresentation.” 

Read more: Ontario ‘crypto king’ allegedly held ransom by investor who lost $740K

John Zinati, a Toronto real estate lawyer uninvolved with the lawsuit, told reporters, “Anybody who is thinking about not disclosing something about a house should think twice because of this decision. From my perspective, it really expands what you have to disclose about a house.”

‘Crypto King’ antics led to mansion safety risk

According to Zinati, cases often require a physical element such as mold or radioactivity to constitute a contract reversal, as opposed to an external factor like duped investors. 

Pleterski is in hot water with investors, who say they’re owed $40 million worth of crypto and foreign exchange investments. Case reports say he invested just 2% of their funds as promised — and instead spent roughly $16 million on private jets, vacations, and luxury cars.

As a result of the lawsuit, the basketballer’s purchase of the property was voided and its estate agents were ordered to compensate every mortgage and insurance payment made since the lawsuit began.

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