On Wednesday, April 15, 2026, the United States Bankruptcy Court for the Southern District of New York denied a request to set aside default judgments against three cryptocurrency wallets owned by Arben Kane, a defendant in a related adversary proceeding. Chief United States Bankruptcy Judge Martin Glenn presided over the case.

The Litigation Administrator, Mohsin Y. Meghji, had previously filed a Status Update detailing Kane’s alleged discovery abuse in the adversary proceedings. The court’s decision followed a hearing on January 15, 2026, regarding Kane’s request and the deficiencies in his compliance with discovery obligations. Meghji argued that Kane had engaged in evasive tactics and requested that the court deny Kane’s request and award expenses incurred due to Kane’s failure to engage in good faith during discovery.

The court had previously granted the Plaintiff’s Motion for Alternative Service, allowing service via airdropping a non-fungible token (NFT) to the cryptocurrency wallet addresses. This method was deemed the best way to notify the wallet owners of the legal actions against them. Kane later admitted to awareness of the claims against him by October 2024 but failed to act before the default was entered in November 2024. He also admitted to accessing the hyperlinked NFT sent to the 0xd3C8e Wallet multiple times.

Kane attributed his failure to acknowledge the claims to “confusion” due to owning approximately 40 digital asset wallets. However, the Litigation Administrator presented evidence that Kane was aware of efforts to identify the owner of the 0xd3C8e wallet, including receiving a subpoena and working on a response, yet waiting nine months to acknowledge ownership.

The court found Kane’s default to be willful, noting his awareness of the allegations and failure to take action. The court also determined that Kane had not demonstrated a meritorious defense and that setting aside the default judgments would prejudice the Plaintiff, who had already incurred substantial costs.

In evaluating the request to set aside the default, the Court considered (1) whether the default was willful; (2) whether setting aside the default would prejudice the adversary; and (3) whether a meritorious defense is presented.

While the request to set aside the Defaults was denied, the court deferred the issue of sanctions against Kane until a subsequent damages inquest to determine the amount of any judgment.

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