New York Judge Awards Damages to Bitfloor Customers But Limits Payout to 2013 Bitcoin Value

On Thursday, September 19, 2024, Manhattan Supreme Court Justice Jennifer G. Schecter granted partial summary judgment in a case involving bygone cryptocurrency exchange Bitfloor and over 200 of its customers’ lost bitcoins.

The judge ruled that Bitfloor improperly failed to return more than 200 bitcoins to five customers upon shutting down in 2013, but said damages would be limited to the dollar value of the digital assets at that time rather than awarding the bitcoins themselves, which are now worth nearly $14 million.

Justice Schecter found that Bitfloor and its founder Roman Shtylman breached these five users’ – Vincent Wu, Dylan Arana, Phil May, Daniel McBride and Seong-Youp Suh – contracts by improperly moving bitcoins between digital wallets, ultimately preventing the customers from withdrawing their total of 217.38 bitcoins when Bitfloor shut down.

While granting summary judgment on the breach of contract finding, the judge denied the customers’ request to receive the 217 bitcoins as damages, instead saying damages would be awarded in U.S. dollars based on the bitcoin price when the breach occurred in 2013.

At the time of Bitfloor’s shutdown in April 2013, the 217 bitcoins were worth only around $15,000. However, Justice Schecter noted that bitcoin’s price rose in subsequent months and ordered further briefing from both sides on when each of the five customers specifically tried and failed to withdraw their funds to set the appropriate damages date.

The judge also granted Bitfloor’s motion to dismiss claims from seven additional customers whose state residence statutes of limitations had expired on losses totaling 101.62 bitcoins.

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