Judge Denies Bitcoin Latinum’s Motion to Compel Arbitration in $500K Crypto Lawsuit

News | July 1, 2024 By:

On Monday, June 17, 2024, the United States District Court for the Eastern District of Michigan denied Bitcoin Latinum’s motion to compel arbitration in a securities fraud lawsuit involving the company’s cryptocurrency, Token.

The case was brought by Raymond Jonna, Simon Jonna, and Farid Jamardov against Bitcoin Latinum and Kevin Jonna in February 2022. The plaintiffs claimed they were induced by false statements to invest almost half a million dollars in Bitcoin Latinum and its Token cryptocurrency. When they asked for their money back, they received no response nor any tokens as part of their investment.

Bitcoin Latinum argued that the plaintiffs were bound by an arbitration agreement found in a Simple Agreement for Future Tokens (SAFT) on the company’s website. However, the judge ruled that the plaintiffs never agreed to the terms of the SAFT, including its arbitration clause. None of the plaintiffs had ever signed a SAFT with Bitcoin Latinum, despite the company claiming the act of sending money in exchange for tokens constituted acceptance of the SAFT.

The judge noted testimony from plaintiff Raymond Jonna that he did not recall seeing or discussing the SAFT with the others prior to investing. Meanwhile, the other two plaintiffs provided affidavits explicitly stating they never saw or signed a SAFT. In contrast, Bitcoin Latinum provided no evidence that any plaintiff had signed the agreement.

Further, the judge determined that merely posting the SAFT online did not expressly condition receipt of investments on acceptance of its terms, unlike in some employee handbook cases where continuing work was deemed acceptance. Prior case law suggested unwitting actions alone do not constitute acceptance of contract terms. As the plaintiffs unequivocally denied knowledge of the SAFT, their investments could not be seen as implied acceptance.

Even if the plaintiffs were somehow bound to the SAFT’s arbitration clause, the judge found Bitcoin Latinum had waived its right to enforce arbitration through its inconsistent actions.

Over the past two years, Bitcoin Latinum filed answers, motions, responses and participated in conferences, hearings, and an appeal, all while not mentioning arbitration. By extensively litigating the case in court for so long before requesting arbitration, Bitcoin Latinum waived the right to compel arbitration as an intentional relinquishment of a known right.

The judge’s ruling allows the securities fraud lawsuit brought by the plaintiffs against Bitcoin Latinum and Kevin Jonna to continue proceeding in open court.

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