Court Dismisses Elder Abuse Case Against Crypto.com

On Thursday, April 10, 2025, the United States District Court for the Northern District of California granted a motion to dismiss filed by Foris DAX, Inc., operating as Crypto.com, in a lawsuit brought by Jung Min Lee. The case, overseen by U.S. District Judge William H. Orrick, involves allegations that Crypto.com facilitated a cryptocurrency scam targeting Lee’s elderly husband, resulting in the loss of community property.

Lee filed the lawsuit in July 2024 in California Superior Court, naming Crypto.com, First Republic Bank, and its employee Catherine Evans as defendants. The case was removed to federal court in August 2024 by the Federal Deposit Insurance Corporation, acting as receiver for First Republic Bank, which had closed in May 2023. Lee’s amended complaint, filed in December 2024, alleged that Crypto.com violated California’s Elder Abuse and Dependent Adult Civil Protection Act, the Unfair Competition Law, aided and abetted fraud, and acted negligently.

According to court documents, Lee’s husband, Donald Patz, aged 69, was contacted by scammers via Instagram in January 2023. The scammers, communicating through WhatsApp, persuaded Patz to invest in a fraudulent cryptocurrency scheme, directing him to use a fake application mimicking the legitimate Changelly platform. Patz opened an account with Crypto.com and transferred approximately $1.25 million from joint accounts held with Lee at First Republic Bank. These accounts contained community property, in which Lee claimed a legal interest. The funds were converted into Tether, a cryptocurrency, and transferred to the scammers. Patz later realized the site was fraudulent after attempting to withdraw funds and being asked to pay additional fees.

Lee alleged that Crypto.com knew Patz was a victim of fraud and failed to prevent the transactions, citing interactions during a “whitelisting” process where Crypto.com questioned Patz about his account activity. She claimed the company earned fees from the transactions despite red flags.

Judge Orrick’s ruling addressed Crypto.com’s motion to dismiss, which argued that Lee lacked standing and failed to state valid claims. The court assumed Lee had general Article III standing due to the loss of community property but found she lacked standing to bring claims under the Elder Abuse Act, as she is not an elder or her husband’s representative. The court also dismissed her Unfair Competition Law claim, noting that Lee did not rely on Crypto.com’s alleged misrepresentations, a requirement for fraud-based claims. Her negligence claim was dismissed because Lee had no relationship with Crypto.com, and the company had no knowledge of her existence or financial connection to Patz. The aiding and abetting claim was dismissed due to a lack of clarity about the underlying tort but with permission to amend.

The court granted Lee leave to amend her aiding and abetting claim and the unlawful prong of her Unfair Competition Law claim. Other claims against Crypto.com were dismissed with prejudice, meaning they cannot be refiled.

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