$3.3m EUR gone? When escrow services go wrong

Quick Take

  • Symphony FS, LTD v. Thompson
  • Defendant claims that seller’s escrow agent stole the money
  • The Court wasn’t convinced that Plaintiff satisfied the standard for getting injunctive relief
  • Asset freeze request denied

The Block is delighted to bring you expert cryptocurrency legal analysis courtesy of Stephen Palley (@stephendpalley) and Nelson M. Rosario (@nelsonmrosario). They summarize three cryptocurrency-related cases on a weekly basis and have given The Block permission to republish their commentary and analysis in full. Part I of their analysis, Crypto Caselaw Minute, is below.


This week’s CCM looks at just what passes for an asset these days, takes a look at when escrow services go wrong, and we are lucky to have a guest post from attorney Andrés Chomczyk who breaks down a recent criminal case in Argentina concerning the theft of ether from an exchange. (As always, Rosario summaries are “NMR” and Palley summaries are “SDP”, and for this week our guest summary is labeled “ACH.”)

Disclaimer: These summaries are provided for educational purposes only by Nelson Rosario [twitter: @nelsonmrosario] and Stephen Palley [twitter: @stephendpalley]. They are not legal advice. These are our opinions only, aren’t authorized by any past, present or future client or employer. Also we might change our minds. We contain multitudes.

[related id=1]Symphony FS, LTD v. Thompson, 2018 U.S. Dist. LEXIS 21464 (E.D. Pa. 5:18-cv-3904, 12/20/2018) [SDP]

Link to opinion

This case involves a dispute over the use of escrowed funds to purchase bitcoin. It also shows the peril of sending money for bitcoin to an escrow agent who doesn’t actually hold the crypto.

Here’s the gist: Plaintiff (“Symphony”) says that it wired $4 million to defendant to buy bitcoin and instead bought bitcoin for itself. Defendant (“Thompson”) says the money was stolen by the seller’s escrow agent. Plaintiff filed a lawsuit and sought a temporary restraining order and a preliminary injunction seeking an asset freeze. The Court said no.

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