Michael Best secured an arbitration win for a dispute over a cryptocurrency trade on behalf of its client Jered Kenna, a startup and digital currencies investor. The win comes after Kenna’s former trading partner, Cumberland Mining & Materials, a proprietary trading firm, filed a lawsuit against him for $4.3 million after a cryptocurrency purchase went awry.
As a result of the complaint, the case was submitted to arbitration pursuant to the Cryptocurrency Purchase Agreement (CPA) that had been signed by both parties at the onset of the business relationship.
In the planned December 2017 trade, Kenna offered to sell to Cumberland over $2.2 million worth of Ripple (XRP). Shortly thereafter, Kenna discovered that he had been a victim of a cyberattack and the cryptocurrency had been stolen, leaving Cumberland to purchase third party inventory to cover the sale of XRP. In the interim, the price had risen, leaving Cumberland to pay $4.3 million more than originally agreed with Kenna.
In arbitration, it was determined that Cumberland had not followed the procedures established by its own CPA by not responding to Kenna’s offer within the timeframe set forth. As a result, it was decided Kenna and Cumberland did not actually execute a trade, clearing Kenna of the $4.3 million charge.
“This is a unique case, due to the fact that Jered succeeded in finding refuge in Cumberland’s own documentation,” said James Fieweger, the lead attorney for Kenna. “Jered took the appropriate steps to adhere to all the requirements of the agreement, and this ruling is indicative of the importance of procedural elements during the complex transactions we see with digital currencies.”
The case is Cumberland Mining & Materials, LLC vs. Kenna, Jered, JAMS Ref No. 1340015450