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

ChainCatcher report: A judge in the U.S. District Court for the Southern District of New York, Judge Lewis Kaplan, denied the defendant’s 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. It alleges that multiple defendants used NFTs and crypto investment pools as a vehicle to operate a fraud scheme allegedly of a Ponzi-like nature, promising investors high returns. As of now, estimated losses have already exceeded $20 million, with an estimated total amount involved of approximately $440 million. The court rejected all of the defendants’ defenses raised on issues including jurisdiction, venue, and service procedures.

Regarding defendant Cyrus Abraham’s refusal to respond on the grounds that there were technical defects in service, the judge made it clear that the litigation process 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 already allowed service of legal documents by alternative methods such as Ethereum wallets, email, and social media.