Former influential cryptocurrency influencer Alex Saunders has been ordered by the Supreme Court of Victoria to pay upwards of A$500,000 to one of his followers after he failed to respond to a lawsuit as reported by Crypto News on August 11.
This is the first time in Australia that a follower has successfully sued a cryptocurrency influencer for losses incurred on an investment.
The Supreme Court of Victoria ruled on October 14 that Saunders has to pay back the funds, plus interest and legal fees, as a default ruling because the defence did not file a response within the 42-day deadline.
The default settlements of A$487,805 (including A$8,534 for interest) and A$4,156 for legal fees are to be paid to New Zealand investor Ziv Himmelfarb for the “crypto loans” he made to Saunders earlier this year.
The court statement of claim included a “long/short crypto fund” sent by Saunders via Facebook on February 17, 2021, leading to Himmelfarb sending over A$250,000 worth of bitcoin to subscribe for an interest in the crypto fund.
The court order also includes a section where Himmelfarb also sent Saunders around A$65,000 worth of USDC for a “DCB project”, for which Saunders was allegedly raising capital from his community.
Along with the crypto fund investment and the DCB project, Himmelfarb sent Saunders A$144,305 worth of ETH (Ethereum) coins in an “ETH coins loan”.
Unregistered Crypto Funds
The crypto fund and DCB projects in question were pursued in the lawsuit as being unregistered under section 601EB of the Act. As mentioned, this allows the investor to lay claim to a contract breach whereas the investment scheme has not been registered in Australia as required under the Corporations Act.
Bankruptcy Notice Issued
Following the application, the Australian Financial Security Authority has issued a bankruptcy notice, giving Saunders 21 days to pay, failing which Himmelfarb can file a creditor’s bankruptcy petition. Crypto News asked Himmelfarb if he had any comments and he said:
My only comment is that I hope I don’t have to go all the way through to bankruptcy, but I won’t hesitate to do that if Alex doesn’t pay.
Ziv Himmelfarb
Related News
Controversy on Twitter followed a story published and since removed by news.com.au regarding a former colleague of Saunders, Ben Simpson, who has been contacted by Crypto News with a list of questions regarding his business relationship with Saunders and involvement with any other projects.
Crypto News has also contacted Saunders to add comments for this story, but he has maintained his silence through all channels.
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