Xapo, Indodax exchanges hit with lawsuit over ‘stolen’ BTC

Digital currency exchanges Xapo and Indodax are accused of holding alleged stolen BTC. According to Dennis Nowak and his lawyer David Silver, the two exchanges are holding a total of 500 BTC that was stolen from him in 2018. 

The case

Nowak claimed that on November 18, 2018, he deposited 500 BTC into his U.S.-based digital currency exchange account (the exchange is not named in the court filing). Nowak said that by November 23, 2018, all of his BTC had been stolen from his account. To trace his stolen funds, Nowak hired Kroll, the digital currency compliance and investigations solutions firm, which discovered that Nowak’s 500 BTC were stolen via four withdrawals. The firm also found that 479.69 of Nowak’s 500 BTC are held in three digital currency wallets on the Indodax Exchange, and the remaining 19.99 of Nowak’s BTC are held in two wallet addresses on Xapo exchange. 

When Nowak made his deposits on November 18, Nowak’s 500 BTC was worth roughly $2.3 million. Today, his 500 BTC are worth about $4.9 million.

The charges

Nowak has pressed charges against Hong-Kong based Xapo, and Indonesia-based Indodax, claiming that both exchanges are allegedly in possession of stolen property, violated the Computer Fraud and Abuse Act, and have assisted an individual in unlawfully accessing a computer.

Nowak hopes that the U.S. District Court for the Northern District of California will serve justice by returning Nowak’s stolen personal property (500 BTC) and by providing him with additional relief.

Nowak is represented by David Silver, a known lawyer in the blockchain and digital currency space. Silver and his firm, Silver Miller, exclusively represent aggrieved investors and digital currency users worldwide who seek to recover their financial losses.