A federal judge has decided to sustain a restraining order imposed against Wei Wu, the alleged creator of the crypto yield project SpartacusDAO and their SPA token, to keep their estimated $35 million worth of crypto assets frozen. Victor Marrero, the judge supervising this case in the Southern District of New York, argued that this order will stay in effect until Wu starts to cooperate with the court. This decision comes amid a legal battle between Wu and Patagon Management LLC, an investment company which claims Wu acted against investor interests.
The dispute between Wu and Patagon began last year when the SPA token holders wished to dissolve the DAO and give its value back to token holders. However, Wu did not respond to their requests and instead gained over $4 million in profits while organizing his own redemption program. Moreover, Patagon accuses Wu of violating securities laws and shareholder obligations. Patagon Management LLC decided to take action by triggering a lawsuit against the DAO leader, yet he was nowhere to be found.
After private investigators could not locate Wu, Patagon sought out a different way to give him legal papers, which eventually led them to the Discord server. They posted the notice on the server, only to have it immediately deleted and their lawyer banned from the server. This incident raises several questions regarding legal endeavor in the realm of cryptocurrency, where individuals are rarely physically present, and hence addresses and documents cannot be physically served.
In response to this, Nelson Rosario, a lawyer in the crypto sector, argued that “if the only manifestation of a party that wronged you is via a Discord server, that’s where you have to go to serve them.” To do so, Patagon Management LLC decided to serve Wu with legal papers via an NFT, although it is unclear whether this method was successful.
Wei Wu has yet to give any response to the allegations, let alone make an appearance at court. Thus, the judge has kept the restraining order in place, since it is the only temporal measure taken to prevent the DAO leader from using the $35 million frozen funds. This hearing left several questions raised and highlights the need for better legal infrastructure in the crypto space, in order to avoid situations like this from happening in the future.
Lydia Thomas
- 2023-05-04
Restraining Order on Alleged Crypto Yield Project Creator Sustained
A federal judge has decided to sustain a restraining order imposed against Wei Wu, the alleged creator of the crypto yield project SpartacusDAO and their SPA token, to keep their estimated $35 million worth of crypto assets frozen. Victor Marrero, the judge supervising this case in the Southern District of New York, argued that this order will stay in effect until Wu starts to cooperate with the court.
