Partial view of blurred judge holding gavel

Kyle Roche comments ‘uniquely stupid,’ says judge deciding whether to kick firm off lawsuit

The U.S. judge in charge of Roche Freedman’s class action suit against Bitfinex and Tether called their founding partner’s admission that the firm uses litigation to attack crypto competitors ‘uniquely stupid’ in a hearing set to determine whether the firm will be kicked off the case.

The hearing, which took place Monday, concerned motions filed by both the defendants (Tether, Bitfinex and Bittrex) and Roche Freedman’s co-counsel (firms Selendy Gay Elsberg and Schneider Wallace) to have Roche Freedman kicked off the case. The motions were filed after a leak showed Roche Freedman co-founder Kyle Roche bragging about using straw plaintiffs to sue companies within the digital asset industry—and especially competitors of Ava Labs, a crypto company in which Roche Freedman partners have a sizeable stake.

Roche Freedman notified the courts in its various class action cases that Kyle Roche was withdrawing as counsel due to no longer serving the firm’s class action practice, but the defendants said this didn’t go far enough, filing a motion for the Roche Freedman firm to be disqualified from the case.

Debevoise and Plimpton, the firm representing Tether and Bitfinex, argued that Roche’s statements raised “grave concerns… regarding the motivations behind filing the lawsuit, the purpose for which discovery has been sought, and whether the highly sensitive, confidential information [Bitfinex and Tether] have provided is being misused.”

McNaul Ebel Nawrot & Helgren, the firm representing co-defendants Bittrex, said in written arguments that “simply accommodating Mr Roche’s withdrawal is not sufficient. He remains a member of Roche Freedman, and it must be assumed that, just as the actions he described in the recently released videos benefited Mr Roche, his firm, and Ava Labs, any further access by Roche Freedman to the highly confidential materials produced in this matter may be subject to similar misuse.”

As well as the defendants, Roche Freedman’s co-counsel on the case Selendy Gay Elsberg and Schneider Wallace also requested that Roche Freedman be removed, as did Kirby McInerney, a firm representing a small number of the plaintiffs. Kirby McInerney argued to the court that the leaks “are and will likely to continue to be detrimental to [the plaintiffs] and the putative class,” requesting that their firm replace Roche Freedman as co-counsel.

At the hearing, Vel Freedman acknowledged that Roche’s filmed comments were “stupid.” However, he argued on behalf of Roche Freedman that the leaks came from an unnamed defendant in a different case, and that the firm had removed Roche from the firm’s class action practice and ‘walled off’ from its existing cases.

The requests in the Tether case are one of many now facing Roche Freedman as a result of the leaks. Last week, Roche Freedman was hit with a sweeping document request as part of a motion to disqualify the firm in another case, Tulip Trust v Ira Kleiman. Tulip Trust is closely associated with Dr Craig Wright, who Kyle Roche refers to by name as an example of one of his firm’s targets for litigation.

The judge is expected to rule whether Roche Freedman will be booted from the Tether/Bitfinex class action within a week.

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