TRO Granted in Bitconnect ICO Lawsuit

January 30

We previously reported how, in the Tezos litigation, the court denied a temporary restraining order that sought to enjoin the defendants from selling, transferring, converting, or otherwise disposing of any assets collected or derived from an ICO, holding that plaintiff had failed to show that he is likely to suffer irreparable harm in the absence of injunctive relief.  Today, in connection with the class action against BitConnect, (Paige v Bitconnect, case 3:18-cv-0058-JHM W.D. Ky 1-30-18), the district court did grant a TRO.  The court found that the plaintiffs stood to lose any chance of recovering their funds if BitConnect’s assets were not frozen, and that enforcing a TRO is in the public interest because the public is interested in preventing massive consumer fraud and other securities violations.  The court forbade BitConnect from moving assets unless allowed by the Court ordered the defendants to:

disclose a) all Bitcoin and other cryptocurrency wallet addresses, b) all cryptocurrency trading account addresses, and c) the identity of  the holder/owner of any wallet or cryptocurrency address to which Defendants have transferred any Bitcoin or other cryptocurrency in the past 90 days, so that these assets can be monitored and traced.

One other notable aspect of this TRO was that it was granted without notice to the defendant, which is almost unheard of in litigation practice today in the United States.

David Zaslowsky has a degree in computer science and, before going to Yale Law School, was a computer programmer. He is currently the Chairman of the Litigation Department of the firm’s New York office. His practice focuses on international litigation and arbitration. He has been involved in cases in trial and appellate courts across the United States and before arbitral institutions around the world. Many of David’s cases, including some patent cases, have related to technology. Since 2008, David has been included in Chambers for his expertise in international arbitration.