Plaintiff in $165K Crypto Scam Case Denied Default Judgment for Third Time

On Tuesday, May 28, 2024, the United States District Court for the Middle District of Florida denied without prejudice a plaintiff’s request for a default judgment in a case involving significant cryptocurrency losses.

Vincent Trapenard had filed a lawsuit in April 2022 against Nathan Clester and others, alleging he lost around $165,000 due to a scam related to digital assets. While initial claims were made against multiple defendants, the case was later focused on state law claims of conversion, unjust enrichment, and fraud solely against Clester.

The plaintiff had attempted on multiple occasions to obtain a default judgment as the defendant did not respond to the suit. However, the court raised several issues that prevented ruling in the plaintiff’s favor. Specifically, the dismissal of federal claims meant jurisdiction was unclear, as the remaining claims were based on state law between apparently non-diverse parties.

Personal jurisdiction over Clester, who was evading service and did not reside in Florida, was also not fully established. In addition, the request for damages was not supported by admissible evidence like a sworn affidavit. The choice-of-law analysis also did not cover which state’s law applied to the unjust enrichment claim.

In its order, the court denied the amended request without prejudice, while noting this was the third time issues had come up in the default judgment motions. However, one final chance to address all the concerns was given – the plaintiff could submit another renewed motion within 21 days to properly support entitlement to the relief sought through default.

If deficiencies remain or the deadline is missed, the magistrate judge warned the entire case may be dismissed without prejudice. It remains to be seen if the losses from an alleged cryptocurrency scheme can be recovered through the legal system, given the jurisdictional and evidentiary obstacles that have arisen to obtaining a default ruling so far.

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