Judge Partially Grants Warp Data’s Motion to Quash Interrogatories in Bitcoin Forfeiture Case
On Tuesday, July 7, 2026, United States Magistrate Judge Clay H. Kaminsky of the U.S. District Court for the Eastern District of New York granted in part and denied in part a motion filed by Warp Data Technology Lao Sole Co. Ltd. ("Warp Data") to quash special interrogatories.
Warp Data, a Laos-based cryptocurrency mining company, is involved in an in rem civil action initiated by the US government in October 2025, seeking the forfeiture of approximately 127,271 bitcoin. The government alleges these bitcoins are proceeds of a cryptocurrency investment fraud and money laundering scheme orchestrated by Chen Zhi, chairman of Prince Holding Group.
The government's complaint details a transnational cryptocurrency fraud scheme where Zhi and other Prince Holding Group executives allegedly operated a forced labor compound to execute scams, generating illicit proceeds that were then laundered through online gambling and cryptocurrency mining. Warp Data is identified in the complaint as a "Prince Group mining operation."
In February 2026, the government served special interrogatories on Warp Data to assess its standing in the forfeiture case, as permitted by Supplemental Rule G(6) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. Warp Data responded to some interrogatories and objected to others. Following a meet-and-confer, the government served additional clarifying requests, termed Supplemental Interrogatories, on March 25, 2026. Warp Data's motion sought to quash both sets of interrogatories, while the government opposed the motion and sought to compel responses.
Warp Data argued that the government's complaint sufficiently established its standing, rendering the interrogatories unnecessary. However, Judge Kaminsky found this argument unpersuasive, stating that the allegations in the complaint did not definitively establish Warp Data's ownership or possessory interest in the defendant bitcoin. While the complaint noted Warp Data's mining operations generated some bitcoin, it did not allege Warp Data owned any of the newly mined bitcoin seized, leaving open the possibility that Warp Data transferred its interest.
The court also addressed Warp Data's objections to interrogatories requesting information about the source and nature of its ownership interest in the defendant bitcoin. Judge Kaminsky ruled that such interrogatories are within the scope of Supplemental Rule G(6) because they aim to clarify a claimant's standing. Information regarding how the bitcoin Warp Data claims were mined, stored, or transferred is relevant to understanding its relationship with the defendant property. The government is entitled to probe the circumstances of Warp Data's asserted ownership.
Regarding interrogatories about third parties, including other claimants like LuBian, Prince Holding Group, and Chen Zhi, the court determined that some requests were appropriate to clarify whether Warp Data's relationship with these parties affected its ownership interest in the defendant bitcoin. The court noted that "straw owners," who legally own property but hold it for another party, lack standing because they do not suffer the injury from the property's seizure. Interrogatories that test whether Warp Data is the true owner or merely a nominee for a third party were deemed permissible.
However, Judge Kaminsky found certain interrogatories to be overbroad. For instance, requests for information about Warp Data's assets not part of the defendant res, or broad requests for all documents and communications related to Chen Zhi, were deemed disproportionate to the needs of the standing inquiry. Warp Data was directed to supplement its responses to specific interrogatories concerning its identity, ownership interest, and relationship with certain third parties, while being excused from responding to others.
In conclusion, the court granted in part and denied in part Warp Data's motion to quash. Warp Data is required to respond to specific special and supplemental interrogatories within 30 days of the order.
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