Granting Waymaker Motion, Florida Court Dismisses Complaint Against Cryptocurrency Exchange Payward, Inc.

In a dispute over the alleged theft and laundering of bitcoin allegedly worth more than $80 million, Brian Klein, Scott Malzahn and Jose Nuño led the Waymaker team who won dismissal of a lawsuit brought against the Kraken cryptocurrency exchange for lack of personal jurisdiction in Florida. In a 36-page opinion entered on August 8, 2024, Circuit Judge Thomas J. Rebull granted the motion to dismiss filed by Waymaker on behalf of Kraken in the matter of Kowalski v. Binance Holdings, Ltd.

Plaintiff originally filed suit in Florida state court in Miami-Dade County against 11 individual and corporate defendants from Hong Kong, Russia, the United States and Singapore alleging they conspired with each other steal, launder or dissipate Plaintiff’s stolen bitcoin. Plaintiff alleged that more than 1,400 bitcoin was stolen from him in a malicious malware attack in Australia that caused the bitcoin to be transferred to a foreign electronic address. Plaintiff’s investigator allegedly traced about 15% of the bitcoin to accounts on the Kraken exchange, including accounts allegedly used by a Florida resident to sell the bitcoin. Waymaker filed a motion to dismiss for lack of personal jurisdiction and failure to state a claim. The Court subsequently granted Plaintiff’s request for jurisdictional discovery given Plaintiff’s allegations that the Kraken was part of a conspiracy with a Florida resident. In supplemental briefing, Waymaker argued that discovery failed to substantiate Plaintiff’s conspiracy allegations, a substantial aspect of the underlying tort of conversion did not occur in Florida, and the assertion of specific personal jurisdiction over Kraken violated the Fourteenth Amendment to the U.S. Constitution. The Court agreed with each of these arguments, and dismissed Kraken for lack of personal jurisdiction.