Blockstart Ventures Fights to Keep Crypto Strategies Secret in Lawsuit

On Friday, March 29, 2024, law firm Dechert LLP filed a response on behalf of their clients Blockstart Ventures Mgmt LLC, Raman Bindlish, and Nicholas M. Mavris in the United States District Court for the Northern District of California.

The filing was in response to an administrative motion from the plaintiff seeking to file under seal certain portions of the original complaint. The defendants’ law firm argued that compelling reasons existed to keep confidential several quotes and references from two internal documents – a Private Offering of Limited Partnership Interests (PPM) and an Amended and Restated Limited Partnership Agreement (LPA).

Both the PPM and LPA contained non-public, proprietary, and confidential information regarding Blockstart Ventures’ business strategies and objectives. Specific references called out included details on the types of cryptocurrency assets the firm sought to acquire and hold, as well as the nature of partnerships in the growing digital currency sector.

Blockstart Ventures operates in the blockchain and cryptocurrency investment space. In their filing, the defendants stressed the competitive nature of the industry and argued that releasing sensitive details on their business model could lead to harm. Competitors could potentially use insights from the leaked information to mimic Blockstart’s strategies and even undermine deals. With the market for Bitcoin, Ethereum, and other digital currencies morphing rapidly, firms closely guard innovative approaches.

The response asserted Kamakana v. City and County of Honolulu precedent that demonstrates confidential commercial materials may be sealed to prevent improper advantage by competitors. It also cited several other cases where courts recognized competitive risks around the disclosure of proprietary investor targeting and processes.

To conclude, the defendants stated that narrowly tailored redactions of the complaint were necessary due to the susceptibility of their blockchain-focused venture capital work to exposure. They maintained no alternative to partial sealing would sufficiently protect from the risk of commercial harm.

Please contact BlockTribune for access to a copy of this filing.