Magistrate Judge Recommends Awarding Investor Full Repayment in Cryptocurrency Dispute

On Wednesday, April 10, 2024, Ona T. Wang, a magistrate judge in the Southern District of New York, issued a report recommending damages in a breach of contract lawsuit involving cryptocurrency.

The case was between Javon Johnson and Kenneth Reece. Johnson had sued Reece claiming breach of contract, breach of fiduciary duty, and unjust enrichment after Reece failed to repay Johnson for his investment in Reece’s cryptocurrency exchange startup called BloxXwop. Johnson had invested $150,000 USD and additional funds paid in bitcoin in October and November 2020 in exchange for equity in the company. However, the exchange failed to generate the business that Reece had promised and did not pay any returns to investors.

In June 2021, the two parties entered into an agreement that required Reece to buy back Johnson’s shares in the company for the same amount Johnson had initially invested, totaling $185,000. The agreement set a closing date of February 2022, which was later extended to March 30, 2022. However, Reece failed to repay Johnson by the deadline. Johnson then sued Reece in November 2022 over the breach of the agreement.

Reece did not respond to the lawsuit and in July 2023, the presiding judge issued a default judgment against Reece. The case was then referred to Magistrate Judge Wang for a determination of damages owed to Johnson. In her report, Judge Wang reviewed the facts of the case presented by Johnson and recommended damages based on the allegations.

Judge Wang found that Johnson provided evidence to support his investment of $185,000 in BloxXwop and that Reece breached their agreement when he failed to repay the amount by the deadline. As a result, she recommended Johnson be awarded $185,000 in compensatory damages, the full amount he initially invested. The report also recommended an additional $21,667.80 in pre-judgment interest dating back to when the breach first occurred in April 2022.

Post-judgment interest was also recommended from the date of the default judgment until the full amount was paid. Judge Wang’s report will now be reviewed by the presiding judge for the court’s final ruling in the case. The damages, if approved, would allow the investor to recoup his lost funds from the failed cryptocurrency startup.

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