KeeperDAO Partners Clash Over Ownership of $220K in Cryptocurrency Held in Shared Account

News | April 19, 2024 By:

On Friday, April 5, 2024, the United States District Court for the Eastern District of North Carolina, Western Division issued a ruling in a case involving a dispute over ownership of digital assets.

Joseph Zacherl and Kasparov Pte Ltd were partners in KeeperDAO, a decentralized platform that utilizes AI bots to scan blockchain networks for arbitrage trading opportunities in cryptocurrency markets. In July 2020, Kasparov created a Binance account for Zacherl to use for storing and trading cryptocurrencies related to their work with KeeperDAO. Zacherl deposited some of his personal cryptocurrency holdings, valued at around $220,000, into this shared account and also used an AI trading bot named Arby to execute trades and generate profits.

However, in July 2022 a dispute arose over how much cryptocurrency each partner was owed. On July 21st, Kasparov changed the password to the Binance account, locking Zacherl out and assuming sole control over the digital assets inside. Zacherl alleged that the only cryptocurrency remaining in the account belonged to him personally.

Zacherl then filed counterclaims against Kasparov, arguing that by restricting his access, Kasparov had essentially stolen his cryptocurrency. He set forth causes of action for conversion, unjust enrichment, breach of contract, and breach of the implied covenant of good faith and fair dealing.

In its ruling, the District Court granted Kasparov’s motion to dismiss three of the four counterclaims but allowed the conversion claim to proceed. The court found that while Zacherl had sufficiently alleged unlawful exercise of control over cryptocurrencies he owned, the other claims were not supported by the facts pled. Specifically, there was no evidence Kasparov financially benefited from the digital assets or that the partnership agreement covered ownership of the Binance account.

The case will now move forward solely on the conversion counterclaim, as Zacherl seeks to recover the $226,850.368 value he says Kasparov has wrongfully withheld from him in Bitcoin, Ethereum, and other cryptocurrencies.

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