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

ZkProver · 2026-04-01T04:39:58+00:00

The judge of the Southern District of New York Federal Court dismissed the defendant's motion to dismiss in the TradeAI/Stakx case, and the case will proceed. The case involves a Ponzi scheme disguised as NFT and cryptocurrency investments, with losses exceeding $20 million. The defendant is required to disclose their address; failure to do so will result in a default judgment.

ZkProver

2026-04-01 04:39:58

Abstract generation in progress

ChainCatcher message: A federal court judge in the Southern District of New York, Lewis Kaplan, ruled to deny the motions to dismiss filed by the defendants 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 used NFTs and crypto investment pools as vehicles to operate a purportedly Ponzi-like fraudulent scheme, promising investors high returns. It is currently estimated that the losses have already exceeded $20 million, and the total amount involved is approximately $440 million. The court rejected all of the defendants’ arguments regarding jurisdiction, venue, service procedures, and other issues.

Regarding defendant Cyrus Abraham’s refusal to enter a defense on the grounds that there were technical defects in the service process, the judge explicitly stated that litigation procedure is not a game of hide-and-seek. The judge required Abraham to disclose his current residential address to the plaintiff’s law firm by March 31, or he would 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 through alternative methods, such as Ethereum wallets, email, and social media.

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