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While cryptocurrency trading has long evaded the purview of regulators and courts alike, its days as the Wild West of finance may be coming to an end. Still, in such a fast-evolving industry, scams can be rampant, and it’s not always clear how to fight back against potentially anonymous traders using exchange platforms registered all around the world.

Cryptocurrency fraud litigation can result, but certain variables have to align just right. Just ask David McGill and Benjamin Sauter, litigators at Kobre & Kim who in February 2018 filed a complaint in the Superior Court of Delaware on behalf of their client Elizabeth White. White, who according to the complaint is the CEO of a Delaware-registered company which sells fine art, luxury goods and “is also actively involved in cryptocurrency mining, trading, and investing,” was the victim of cryptocurrency fraud.

In late December 2017, an anonymous man referred to in the complaint as John Doe contacted White about a potential cryptocurrency transaction, where White would sell Doe 484,000 ripple—a type of cryptocurrency—in exchange for 46.5 bitcoin. The transaction would take place on a specific online escrow platform that would hold Doe’s bitcoin until White sent her cryptocurrency to Doe’s digital “wallet.”

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Rhys Dipshan

CT-born, New York-based legal tech reporter covering everything from in-house technology disruption to privacy trends, blockchain, AI, cybersecurity, and ghosts-in-the-machine. Continually waiting for law to catch up with tech. (It's like waiting for Godot, but without the clowns)

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