Case Study
In Pre-Class Action Investigation Involving a Decentralized Finance Exchange, FTI Technology Provides Detailed Findings Relating to Alleged Conspiracy to Defraud
A decentralized finance exchange was hacked and facing class action litigation relating to fraud allegations. FTI Technology’s Blockchain & Digital Assets practice was selected by the organization’s law firm to conduct an investigation and uncover key facts.
Situation
The organization, a decentralized finance exchange (DEX), lost more than $50 million in digital assets following the attack. Class action litigation was forming against the organization, including allegations of conspiracy to defraud customers. Outside counsel engaged FTI Technology for the Blockchain & Digital Assets practice’s specialized expertise with conducting cryptocurrency and digital assets investigations. The team was tasked with determining the source of the attacks and validating or disproving anonymous claims relating to the stolen funds.
Our Role
FTI Consulting’s Blockchain and Digital Assets practice has been retained as experts for some of the most high-profile digital assets and cryptocurrency disputes to date. In this matter, the team worked to independently validate the facts of the alleged conspiracy and fraud through:
- Performing on-chain cryptocurrency track and trace investigations to assess and validate the claims brought forth by the source.
- Developing and verifying factual timelines of transactions.
- Assessment of factual evidence, to inform case strategy and next steps for the investigation.
- Advised the client to request “know your customer” (KYC) information for the account holders on each exchange, to verify that the account holders were either known to each other or were in fact, the same person.
Our Impact
FTI Technology’s detailed investigation found no factual substantiation of the allegations made.
The findings included an in-depth outline of all transactions with wallet addresses, time stamps and related transaction history, as evidence of activities on the exchange.
As a result, opposing counsel reconsidered filing the class action litigation. The client was able to avoid a large, expensive and lengthy legal battle.
FTI Technology’s detailed investigation found no factual substantiation of the allegations made.
The findings included an in-depth outline of all transactions with wallet addresses, time stamps and related transaction history, as evidence of activities on the exchange.
As a result, opposing counsel reconsidered filing the class action litigation. The client was able to avoid a large, expensive and lengthy legal battle.