TradeAI/Stakx Ponzi scheme case dismissal request rejected, involving a scale of $440 million

ChainCatcher message: U.S. District Judge Lewis Kaplan of the Southern District of New York ruled to deny the defendants’ motion to dismiss in the TradeAI/Stakx case; the case will continue to move forward.

The case was brought by the cryptocurrency law firm Burwick Law, alleging that multiple defendants, using NFTs and cryptocurrency investment pools as a vehicle, operated a fraudulent scheme alleged to have a Ponzi-like nature, promising investors high returns. It is currently estimated that losses have already exceeded $20 million, with the total amount involved at approximately $440 million. The court rejected all of the defendants’ arguments raised regarding subject-matter jurisdiction, venue, and service procedures.

Regarding defendant Cyrus Abraham’s refusal to appear on the grounds that there were technical defects in the service process, the judge made it clear that litigation procedure is not a game of hide-and-seek. Abraham was ordered to disclose his current residential address to the plaintiff’s law firm by March 31, or he will face a default judgment and further sanctions. The court also extended the formal service deadline to April 22 and has permitted service of legal documents via alternative methods, including Ethereum wallets, email, and social media.