Ohio Appeals Court Upholds Dismissal of Crypto Lawsuit Against Tech CEO
On Thursday, August 29, 2024, the Court of Appeals of Ohio, Fifth Appellate District, Stark County upheld a lower court’s decision to grant summary judgment in a lawsuit between a cryptocurrency investment firm and a former tech company CEO.
The case originated in 2021 when Torea Consulting, Ltd., a Canadian company that invests in digital currencies, sold some computer equipment known as “mining cards” to Squirrels Research Labs (SQRL), a tech startup in North Canton, Ohio. The cards were used to validate cryptocurrency transactions and earn new coins through a process called “mining.” As part of the deal, SQRL agreed to pay Torea 160 units of Ethereum, a popular cryptocurrency.
However, cryptocurrency prices fluctuated significantly in 2021, and SQRL struggled to obtain the funds. The company’s CEO, David Stanfill, personally paid Torea 24 Ethereum from his own holdings to partially fulfill the debt. SQRL then offered to pay the remaining balance in U.S. dollars, but Torea rejected this proposal. In June 2021, SQRL attempted to pay the outstanding 136 Ethereum, but Torea again refused the funds.
With the debt unpaid, Torea sued SQRL in August 2021 but voluntarily dismissed the case after the company declared bankruptcy. In June 2022, Torea filed a new lawsuit against Stanfill individually, alleging fraud, unjust enrichment, conversion of property, and breach of fiduciary duty related to the unpaid cards.
Stanfill filed for summary judgment, asserting there were no factual issues left to debate. In supporting documentation, he showed making a good faith effort to pay the debt over time and never improperly gaining from the transaction. In January 2024, the lower court sided with Stanfill, finding Torea failed to prove its claims.
On appeal, the Fifth Appellate District closely reviewed the negotiations between the parties. The three-judge panel unanimously agreed with the lower court, finding Torea did not provide evidence that Stanfill knowingly deceived or misled the company. The court also found the payment terms were undefined and Stanfill did not unjustly benefit.
With no genuine disputes of material fact, the appellate judges affirmed summary judgment in Stanfill’s favor.
Please contact BlockTribune for access to a copy of this filing.
