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Case No. N18C-02-170 WCC
IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
ELIZABETH WHITE, )
)
Plaintiff, )
) C.A. No. ____________
v. )
) TRIAL BY JURY OF TWELVE
) DEMANDED
JOHN DOE, )
)
Defendant. )
COMPLAINT
follows:
SUMMARY
1. This is an action for damages and the return of certain
scheme implemented by John Doe and persons acting in concert with him (“John
Doe”).
Plaintiff would sell 484,000 Ripple (“XRP”) to John Doe in exchange for 46.5
Bitcoin (“BTC”) using a certain online escrow platform (the “Escrow Platform”).
The agreed-upon sequence of the transaction called for John Doe to deposit 46.5
BTC into the Escrow Platform’s escrow account as a first step. Upon verification
choosing, at which point the Escrow Platform would release the 46.5 BTC to
Plaintiff. John Doe, however, had other ideas. Unbeknownst to Plaintiff, John
Doe entered into the transaction with the specific intent of manipulating the
such a way as to enable him to fraudulently obtain the 484,000 XRP from
Plaintiff, while also retaining the 46.5 BTC that he had agreed to transfer to
Plaintiff.
instructed Plaintiff to send the XRP to a specific digital “wallet”.1 After Plaintiff
sent the XRP to the specified wallet, John Doe falsely claimed not to have
received it. John Doe then tampered with the Escrow Platform’s records to create
the false impression that Plaintiff had sent the XRP to the wrong wallet.
process to engineer the return of the 46.5 BTC that he had previously placed in
escrow. As a result of this fraudulent scheme, John Doe obtained 484,000 XRP
transaction confirm the fraudulent nature of John Doe’s scheme. For example,
Platform confirming that, contrary to what John Doe falsely asserted, Plaintiff
sent the XRP to the wallet specifically designated by John Doe. This receipt also
1
Digital currency can be sent to a specific digital wallet much like emails can
be sent to a specific email address.
2
demonstrates that the Escrow Platform’s transaction records were subsequently
his 46.5 BTC within hours of registering a fictitious dispute, and without an
investigation having been conducted by the Escrow Platform into the false report.
expedited discovery from Bittrex concerning the identity of the John Doe
available relief.
THE PARTIES
7. Plaintiff Elizabeth White is an adult individual who is a resident of
New York, New York. She conducts business through the White Company, a
Delaware entity.
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JURISDICTION AND VENUE
9. This Court has subject matter jurisdiction pursuant to Article IV,
Jurisdiction and venue are proper because, pursuant to 10 Del. C. § 3104, John
Doe, inter alia, transacted business in this State by using Bittrex, a Delaware
corporation, to further his or her unlawful and fraudulent conduct by, inter alia,
funneling the stolen funds to his or her Bittrex account. Further, upon information
and belief, the stolen funds are currently held and/or controlled by Bittrex in
Delaware.
ALLEGATIONS
seller of fine art and luxury goods. The White Company is also actively involved
contacted Plaintiff by telephone and asked to engage in a trade of BTC for XRP,
the proposed trade through the Escrow Platform, which purports to facilitate
12. Over the course of the call, Plaintiff agreed to sell 484,000 XRP to
John Doe in exchange for 46.5 BTC. Plaintiff had not previously traded on the
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Escrow Platform and so, following due diligence, opened an account with the
13. As of the end of December 27, 2017, 46.5 BTC had an exchange
the username “SamB” entered the terms of the trade into the Escrow Platform,
which generated a transaction message in a “chat” box that the parties were
information and belief, John Doe operated or directed the SamB username. At
least initially, the Escrow Platform automatically sent to Plaintiff a copy of John
follows: John Doe would deposit the 46.5 BTC into the Escrow Platform’s escrow
account; Plaintiff would then send the 484,000 XRP to a wallet of John Doe’s
choosing; and finally the Escrow Platform would release the 46.5 BTC to
Plaintiff.
Plaintiff a chat message specifying the digital wallet to which she should send the
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confirmed in a contemporaneous email that the Escrow Platform automatically
sent to Plaintiff. John Doe later altered this wallet address within the chat box as
17. Given the late hour that John Doe had contacted Plaintiff on
December 27, Plaintiff’s XRP were not credited to her Escrow Platform account
until approximately 2:17 pm EST the following day, December 28, 2017.
484,000 XRP to the 5KJx Wallet, as she had been fraudulently instructed to do.
Plaintiff sent the 484,000 XRP to the 5KJx Wallet, John Doe sent a chat message
stating that he had not received the XRP. Plaintiff confirmed that the XRP had
been sent to the 5KJx Wallet, but John Doe falsely responded: “I didn’t send that
address.”
EST to demand payment to a different wallet. He called from the same number
as before.
21. Growing concerned, Plaintiff began reviewing the chat box on the
Escrow Platform. Although John Doe had originally specified the 5KJx Wallet,
chat box had now been fraudulently altered to show a different wallet address,
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thus giving the false impression that Plaintiff had made an error and sent the XRP
on December 28, 2017, but the phone number John Doe had used only minutes
23. As Plaintiff later discovered, the Escrow Platform had by this time
On information and belief, John Doe fraudulently disabled the Escrow Platform’s
EST on December 28, 2017, explaining that there was an issue with the
transaction and that John Doe’s claims of an erroneous wallet were belied by the
pasted. The response failed to address the objective email record showing that
the 5KJx Wallet was correct. Moreover, the “crypto-shuffler” theory made no
sense in light of the fact that Plaintiff had correctly sent the XRP to the wallet
indicated.
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26. Plaintiff followed up with another email to the Escrow Platform at
shuffler” theory did not make sense and why it appeared that the Escrow
Platform’s systems had been compromised in a way that allowed John Doe to
fraudulently modify the messages in the chat box. The Escrow Platform provided
opened a “dispute” with the Escrow Platform. The only notification that Plaintiff
received of the dispute was a chat message, in the same compromised chat box,
demanding that Plaintiff make payment to John Doe or else the trade would be
cancelled and the 46.5 BTC returned to him. There was no reference to Plaintiff’s
cancelled the trade and sent a chat message awarding the dispute to John Doe,
29. Based on these facts and circumstances, it is apparent that John Doe
had gained such pervasive access to the Escrow Platform’s systems that he was
able to fraudulently (a) falsify the chat messages in the Escrow Platform’s chat
box, (b) disable the Escrow Platform’s automated email function, (c) send and
receive emails on behalf of the Escrow Platform, (d) control the Escrow
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amounts. All of these things were done in furtherance of John Doe’s fraudulent
was able to trace all of the stolen XRP to the following Bittrex wallet:
“Bittrex Wallet”).
31. First, as described above, Plaintiff sent the 484,000 XRP from her
32. Second, John Doe then moved the 484,000 XRP piecemeal over the
following days from the 5KJx Wallet to the Bittrex Wallet in a manner that
a. On December 28, 2018, John Doe sent 250,000 XRP directly from
b. On December 29, 2018, John Doe sent the remaining 234,000 XRP
was for 21,700 XRP, one was for 32,000 XRP, and one was for
180,000 XRP. The remaining 300 XRP were left in the 5KJx wallet.
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c. Finally, on December 29, 2018, John Doe again transferred the
amounts above from the d9kH Wallet to the Bittrex Wallet in three
separate tranches.
33. That Plaintiff’s stolen XRP all ended up in the same Bittrex Wallet
despite taking different routes to get there strongly suggests that the person who
perpetrated the fraud (a) is associated with the Bittrex Wallet and (b) undertook
deliberate steps (ultimately in vain) to make it more difficult for Plaintiff to trace
34. Upon tracing the stolen XRP to the Bittrex Wallet, Plaintiff
result of its internal procedures and controls. While Bittrex has been sympathetic
to Plaintiff’s efforts to recover her stolen XRP, pursuant to its internal policies,
Bittrex will not disclose John Doe’s identity without either a subpoena directing
it to do so or John Doe’s consent. To date, John Doe has not given such consent.
Accordingly, shortly after filing this Complaint, Plaintiff intends to seek the
identity and other relevant information concerning the Bittrex Wallet. Plaintiff
will then file an amended complaint upon learning the John Doe’s identity.
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COUNT 1
Replevin
37. The elements of a claim for replevin under Delaware law are: (1) an
unlawful (2) taking or withholding (3) of personal property of another. See, e.g.,
Chick v. Allen, 2014 WL 10187036, at *2 (Del. Com. Pl. Dec. 30, 2014).
38. John Doe has no lawful right to the 484,000 XRP that were stolen
from Plaintiff.
40. The 484,000 XRP are located within the state of Delaware or should
41. The 484,000 XRP rightfully and lawfully belong to Plaintiff because
they were misappropriated from her through fraudulent and deceptive means. As
the rightful owner, Plaintiff has the right to possess the 484,000 XRP
immediately.
43. Plaintiff seeks the immediate return of the 484,000 XRP in the
Bittrex Wallet.
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COUNT 2
when, knowing that the person is not authorized to do so, the person accesses or
932.
unauthorized display, use, disclosure or copy, in any form, of data residing in,
with, damages, destroys or takes data intended for use by a computer system,
data to data residing within a computer system; (3) That person knowingly
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receives or retains data obtained in violation of paragraph (1) or (2) of this section;
or (4) That person uses or discloses any data which that person knows or believes
was obtained in violation of paragraph (1) or (2) of this section. 11 Del C. § 935.
48. On information and belief, John Doe, on his own or in concert with
others, willfully and maliciously violated each of these laws by, among other
things:
escrow; and (iii) sending emails and sending and/or altering chat
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causing to be accessed the Escrow Platform’s computer system,
messages to Plaintiff.
described above.
51. Under Section 941 of the Act, Plaintiff is entitled to treble damages
because John Doe’s conduct was willful and malicious, as well as costs and
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COUNT 3
Fraud
under Delaware law are: (1) a false representation or material omission by the
defendant; (2) with knowledge or belief of its falsity or with reckless indifference
to the truth; (3) intent to induce action or inaction; (4) the plaintiff’s response was
taken in justifiable reliance on the representation; and (5) an injury resulting from
such reliance. See Van Lake v. Sorin CRM USA, Inc., 2013 WL 1087583, at *12
54. John Doe falsely represented to Plaintiff that she was entering into a
transaction on the Escrow Platform and would receive 46.5 BTC in exchange for
55. John Doe knew that these representations were false when they were
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58. John Doe defrauded Plaintiff by causing the Escrow Platform not to
deliver the 46.5 BTC to Plaintiff, and to instead return it to him, despite the fact
COUNT 4
Conversion
61. The elements of conversion under Delaware law are: (1) a distinct
act of dominion (2) wrongfully exerted (3) over the property of another (4) in
denial of his right, or inconsistent with it. See, e.g., Data Mgmt. Internationale,
Inc. v. Saraga, 2007 WL 2142848, at *3 (Del. Super. July 25, 2007) (citing Drug,
62. John Doe is exercising dominion over the 484,000 XRP that were
63. John Doe’s dominion is wrongful because John Doe has no rightful
because they were misappropriated from her through fraudulent and deceptive
means.
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65. John Doe’s continued dominion over the 484,000 XRP is
66. John Doe’s conversion of the 484,000 XRP has proximately caused
COUNT 5
Unjust Enrichment
(In The Alternative)
67. Plaintiff incorporates by reference the allegations contained in the
68. The elements of an unjust enrichment claim under Delaware law are:
and impoverishment, (4) the absence of justification, and (5) the absence of a
remedy provided by law. Jackson Nat. Life Ins. Co. v. Kennedy, 741 A.2d 377,
69. John Doe has enriched himself by appropriating the 484,000 XRP
70. Plaintiff has been impoverished by the loss of the 484,000 XRP.
inconsistent with and in denial of Plaintiff’s right to those assets. Thus, John
72. John Doe has no legal or equitable right to possess the 484,000 XRP.
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73. Absent other relief requested by this Action, no other remedy at law
74. Plaintiff seeks the immediate return of the 484,000 XRP in the
Bittrex Wallet.
COUNT 6
are: (1) a controversy involving the rights or other legal relations of the party
seeking declaratory relief; (2) a controversy in which the claim of right or other
legal interest is asserted against one who has an interest in contesting the claim;
(3) the controversy must be between parties whose interests are real and adverse;
and (4) the issue involved in the controversy must be ripe for judicial
determination. Rollins Int’l, Inc. v. Int’l Hydronics Corp., 303 A.2d 660, 662
(Del. 1973).
78. Plaintiff’s right to the 484,000 XRP is being asserted against John
Doe, who currently possesses the 484,000 XRP and has an interest in contesting
the claim.
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79. Plaintiff’s interest in the 484,000 XRP is real and adverse to the
81. Plaintiff seeks a declaratory judgment that the 484,000 XRP in the
Bittrex Wallet belong to her. This count is not an admission that the return of the
484,000 XRP at its current market value would suffice to make Plaintiff whole or
compensate her for all of the damages she has suffered as a result of John Doe’s
conduct.
RELIEF REQUESTED
WHEREFORE, Plaintiff Elizabeth White respectfully requests that this
Court:
stolen XRP;
Plaintiff;
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G. issue an order directing John Doe to turn over other assets in the
Bittrex Wallet to Plaintiff in full or partial satisfaction of all amounts that may be
H. award Plaintiff such other and further relief as the Court may deem
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