EFiled: Feb 23 2018 06:05PM EST

Transaction ID 61725380
Case No. N18C-02-170 WCC
IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
ELIZABETH WHITE, )
)
Plaintiff, )
) C.A. No. ____________
v. )
) TRIAL BY JURY OF TWELVE
) DEMANDED
JOHN DOE, )
)
Defendant. )

COMPLAINT

Plaintiff Elizabeth White, by and through undersigned counsel, alleges as

follows:

SUMMARY
1. This is an action for damages and the return of certain

cryptocurrency assets that were stolen from Plaintiff by means of a fraudulent

scheme implemented by John Doe and persons acting in concert with him (“John

Doe”).

2. On December 27, 2017, John Doe contacted and, ultimately,

fraudulently induced Plaintiff to enter into a cryptocurrency transaction, in which

Plaintiff would sell 484,000 Ripple (“XRP”) to John Doe in exchange for 46.5

Bitcoin (“BTC”) using a certain online escrow platform (the “Escrow Platform”).

The agreed-upon sequence of the transaction called for John Doe to deposit 46.5

BTC into the Escrow Platform’s escrow account as a first step. Upon verification

of delivery, Plaintiff would send 484,000 XRP to a repository of John Doe’s

choosing, at which point the Escrow Platform would release the 46.5 BTC to
Plaintiff. John Doe, however, had other ideas. Unbeknownst to Plaintiff, John

Doe entered into the transaction with the specific intent of manipulating the

Escrow Platform’s information technology systems and escrow mechanism in

such a way as to enable him to fraudulently obtain the 484,000 XRP from

Plaintiff, while also retaining the 46.5 BTC that he had agreed to transfer to

Plaintiff.

3. The specific mechanics of the fraud worked as follows. John Doe

instructed Plaintiff to send the XRP to a specific digital “wallet”.1 After Plaintiff

sent the XRP to the specified wallet, John Doe falsely claimed not to have

received it. John Doe then tampered with the Escrow Platform’s records to create

the false impression that Plaintiff had sent the XRP to the wrong wallet.

Thereafter, John Doe manipulated the Escrow Platform’s dispute resolution

process to engineer the return of the 46.5 BTC that he had previously placed in

escrow. As a result of this fraudulent scheme, John Doe obtained 484,000 XRP

from Plaintiff without paying anything in return.

4. Contemporaneous records and communications surrounding the

transaction confirm the fraudulent nature of John Doe’s scheme. For example,

Plaintiff received an automatically-generated email receipt from the Escrow

Platform confirming that, contrary to what John Doe falsely asserted, Plaintiff

sent the XRP to the wallet specifically designated by John Doe. This receipt also

1
Digital currency can be sent to a specific digital wallet much like emails can
be sent to a specific email address.
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demonstrates that the Escrow Platform’s transaction records were subsequently

and fraudulently altered by John Doe. Notwithstanding the unambiguous

transaction records retained by Plaintiff, John Doe managed to manipulate the

Escrow Platform’s escrow dispute resolution process so as to secure the return of

his 46.5 BTC within hours of registering a fictitious dispute, and without an

investigation having been conducted by the Escrow Platform into the false report.

5. Using publicly available information from the XRP blockchain,

Plaintiff successfully traced the stolen XRP to an account on a cryptocurrency

exchange platform operated by Bittrex, Inc (“Bittrex”). Plaintiff intends to seek

expedited discovery from Bittrex concerning the identity of the John Doe

accountholder and will file an amended complaint naming that accountholder as

a defendant to his action once his identity is obtained.

6. Plaintiff brings this action to recover her stolen XRP as well as

compensatory damages, statutory treble damages, punitive damages, and other

available relief.

THE PARTIES
7. Plaintiff Elizabeth White is an adult individual who is a resident of

New York, New York. She conducts business through the White Company, a

Delaware entity.

8. Defendant John Doe is an unknown individual who holds funds

stolen from Plaintiff in an account on a cryptocurrency exchange platform

operated by Bittrex. Bittrex is a Delaware corporation.

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 JURISDICTION AND VENUE
9. This Court has subject matter jurisdiction pursuant to Article IV,

Section 7 of the Delaware Constitution, 10 Del. C. § 541, and 10 Del. C. § 6501.

Jurisdiction and venue are proper because, pursuant to 10 Del. C. § 3104, John

Doe, inter alia, transacted business in this State by using Bittrex, a Delaware

corporation, to further his or her unlawful and fraudulent conduct by, inter alia,

funneling the stolen funds to his or her Bittrex account. Further, upon information

and belief, the stolen funds are currently held and/or controlled by Bittrex in

Delaware.

ALLEGATIONS

A. Plaintiff Is Fraudulently Induced To Trade On The Escrow

Platform.

10. Plaintiff is the Chief Executive Officer of The White Company, a

seller of fine art and luxury goods. The White Company is also actively involved

in cryptocurrency mining, trading, and investing.

11. At approximately 7:34 pm EST on December 27, 2017, John Doe

contacted Plaintiff by telephone and asked to engage in a trade of BTC for XRP,

both of which are popular cryptocurrencies. He stated that he wanted to conduct

the proposed trade through the Escrow Platform, which purports to facilitate

digital currency transactions.

12. Over the course of the call, Plaintiff agreed to sell 484,000 XRP to

John Doe in exchange for 46.5 BTC. Plaintiff had not previously traded on the

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Escrow Platform and so, following due diligence, opened an account with the

Escrow Platform that day to carry out the transaction.

13. As of the end of December 27, 2017, 46.5 BTC had an exchange

value of approximately US $736,490.25 (US $15,838.50 for one BTC), and

484,000 XRP had an exchange value of approximately US $677,600 (US $1.40

for one XRP).

14. At approximately 9:00 pm EST on December 27, an individual using

the username “SamB” entered the terms of the trade into the Escrow Platform,

which generated a transaction message in a “chat” box that the parties were

required to use to communicate and memorialize the terms of the trade. On

information and belief, John Doe operated or directed the SamB username. At

least initially, the Escrow Platform automatically sent to Plaintiff a copy of John

Doe’s chat messages by email.

15. Plaintiff understood that the transaction would be sequenced as

follows: John Doe would deposit the 46.5 BTC into the Escrow Platform’s escrow

account; Plaintiff would then send the 484,000 XRP to a wallet of John Doe’s

choosing; and finally the Escrow Platform would release the 46.5 BTC to

Plaintiff.

16. At approximately 9:11 pm EST on December 27, John Doe sent

Plaintiff a chat message specifying the digital wallet to which she should send the

XRP. The wallet provided by John Doe was

“rpbQWxofRaLwTrBqM7BYkqS7AFakbL5KJx” (the “5KJx Wallet”), as

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confirmed in a contemporaneous email that the Escrow Platform automatically

sent to Plaintiff. John Doe later altered this wallet address within the chat box as

part of his fraudulent scheme, as described further below.

17. Given the late hour that John Doe had contacted Plaintiff on

December 27, Plaintiff’s XRP were not credited to her Escrow Platform account

until approximately 2:17 pm EST the following day, December 28, 2017.

18. At approximately 2:17 pm EST on December 28, 2017, Plaintiff sent

484,000 XRP to the 5KJx Wallet, as she had been fraudulently instructed to do.

B. The Fraud Reveals Itself.

19. At approximately 2:21 pm EST on December 28, 2017, shortly after

Plaintiff sent the 484,000 XRP to the 5KJx Wallet, John Doe sent a chat message

stating that he had not received the XRP. Plaintiff confirmed that the XRP had

been sent to the 5KJx Wallet, but John Doe falsely responded: “I didn’t send that

address.”

20. John Doe then called Plaintiff by telephone at approximately 2:31pm

EST to demand payment to a different wallet. He called from the same number

as before.

21. Growing concerned, Plaintiff began reviewing the chat box on the

Escrow Platform. Although John Doe had originally specified the 5KJx Wallet,

as documented in the Escrow Platform’s automatically generated email from 9:11

pm EST on December 27, the corresponding message in the Escrow Platform’s

chat box had now been fraudulently altered to show a different wallet address,

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thus giving the false impression that Plaintiff had made an error and sent the XRP

to the wrong wallet.

22. Plaintiff attempted to call John Doe at approximately 3:06 pm EST

on December 28, 2017, but the phone number John Doe had used only minutes

before had been disconnected and remains out of service.

23. As Plaintiff later discovered, the Escrow Platform had by this time

stopped generating automated emails documenting John Doe’s chat messages.

On information and belief, John Doe fraudulently disabled the Escrow Platform’s

automatic email function in order to eliminate further records of the

communications that took place in the chat room.

24. Plaintiff emailed the Escrow Platform at approximately 3:05 pm

EST on December 28, 2017, explaining that there was an issue with the

transaction and that John Doe’s claims of an erroneous wallet were belied by the

automated email she had received from the Escrow Platform.

25. Someone with an Escrow Platform email address responded only 12

minutes later suggesting that Plaintiff “probably ha[d] a crypto-shuffler” virus.

A “crypto-shuffler” is a virus that transforms a wallet address as it is copied and

pasted. The response failed to address the objective email record showing that

the 5KJx Wallet was correct. Moreover, the “crypto-shuffler” theory made no

sense in light of the fact that Plaintiff had correctly sent the XRP to the wallet

indicated.

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 26. Plaintiff followed up with another email to the Escrow Platform at

approximately 3:31 pm EST explaining why the Escrow Platform’s “crypto-

shuffler” theory did not make sense and why it appeared that the Escrow

Platform’s systems had been compromised in a way that allowed John Doe to

fraudulently modify the messages in the chat box. The Escrow Platform provided

no further response that day.

27. At approximately 3:41 pm EST on December 28, 2017, John Doe

opened a “dispute” with the Escrow Platform. The only notification that Plaintiff

received of the dispute was a chat message, in the same compromised chat box,

demanding that Plaintiff make payment to John Doe or else the trade would be

cancelled and the 46.5 BTC returned to him. There was no reference to Plaintiff’s

earlier emails to the Escrow Platform explaining the situation.

28. The next morning, at approximately 5:44 am EST on December 29,

2017, without any further communications or investigation, the Escrow Platform

cancelled the trade and sent a chat message awarding the dispute to John Doe,

thereby releasing the 46.5 BTC to John Doe.

29. Based on these facts and circumstances, it is apparent that John Doe

had gained such pervasive access to the Escrow Platform’s systems that he was

able to fraudulently (a) falsify the chat messages in the Escrow Platform’s chat

box, (b) disable the Escrow Platform’s automated email function, (c) send and

receive emails on behalf of the Escrow Platform, (d) control the Escrow

Platform’s dispute resolution process, and (e) direct transfers of escrowed

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amounts. All of these things were done in furtherance of John Doe’s fraudulent

scheme to misappropriate Plaintiff’s XRP.

C. Plaintiff Traces the Stolen XRP to a Bittrex Wallet.

30. Within days, and based on publicly available information, Plaintiff

was able to trace all of the stolen XRP to the following Bittrex wallet:

rPVMhWBsfF9iMXYj3aAzJVkPDTFNSyWdKy | user ID: 197755547 (the

“Bittrex Wallet”).

31. First, as described above, Plaintiff sent the 484,000 XRP from her

wallet at the Escrow Platform account to the 5KJx Wallet.

32. Second, John Doe then moved the 484,000 XRP piecemeal over the

following days from the 5KJx Wallet to the Bittrex Wallet in a manner that

suggests a coordinated intent to conceal:

a. On December 28, 2018, John Doe sent 250,000 XRP directly from

the 5KJx Wallet to the Bittrex Wallet.

b. On December 29, 2018, John Doe sent the remaining 234,000 XRP

in three tranches back to the following Escrow Platform wallet:

rMbsvsmfcocbgG3DvqipFEDgViPfuMd9kH | user IDs 14 and 125

(the “d9kH Wallet”). On information and belief, this wallet is the

“Escrow Platform” XRP wallet belonging to John Doe. One transfer

was for 21,700 XRP, one was for 32,000 XRP, and one was for

180,000 XRP. The remaining 300 XRP were left in the 5KJx wallet.

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 c. Finally, on December 29, 2018, John Doe again transferred the

amounts above from the d9kH Wallet to the Bittrex Wallet in three

separate tranches.

33. That Plaintiff’s stolen XRP all ended up in the same Bittrex Wallet

despite taking different routes to get there strongly suggests that the person who

perpetrated the fraud (a) is associated with the Bittrex Wallet and (b) undertook

deliberate steps (ultimately in vain) to make it more difficult for Plaintiff to trace

her stolen XRP.

34. Upon tracing the stolen XRP to the Bittrex Wallet, Plaintiff

contacted Bittrex and convinced Bittrex to maintain an indefinite freeze on the

funds in the Bittrex Wallet until this dispute is adjudicated.

35. On information and belief, Bittrex knows John Doe’s identity as a

result of its internal procedures and controls. While Bittrex has been sympathetic

to Plaintiff’s efforts to recover her stolen XRP, pursuant to its internal policies,

Bittrex will not disclose John Doe’s identity without either a subpoena directing

it to do so or John Doe’s consent. To date, John Doe has not given such consent.

Accordingly, shortly after filing this Complaint, Plaintiff intends to seek the

Court’s permission to issue a subpoena directing Bittrex to disclose John Doe’s

identity and other relevant information concerning the Bittrex Wallet. Plaintiff

will then file an amended complaint upon learning the John Doe’s identity.

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 COUNT 1

Replevin

36. Plaintiff incorporates by reference the allegations contained in the

preceding paragraphs as if fully set forth herein.

37. The elements of a claim for replevin under Delaware law are: (1) an

unlawful (2) taking or withholding (3) of personal property of another. See, e.g.,

Chick v. Allen, 2014 WL 10187036, at *2 (Del. Com. Pl. Dec. 30, 2014).

38. John Doe has no lawful right to the 484,000 XRP that were stolen

from Plaintiff.

39. John Doe is nevertheless in possession of the 484,000 XRP and

withholding them from Plaintiff.

40. The 484,000 XRP are located within the state of Delaware or should

be deemed to be located within the state of Delaware.

41. The 484,000 XRP rightfully and lawfully belong to Plaintiff because

they were misappropriated from her through fraudulent and deceptive means. As

the rightful owner, Plaintiff has the right to possess the 484,000 XRP

immediately.

42. John Doe’s continued dominion over the 484,000 XRP is

inconsistent with and in denial of Plaintiff’s right to those assets.

43. Plaintiff seeks the immediate return of the 484,000 XRP in the

Bittrex Wallet.

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 COUNT 2

Misuse of Computer System Information Act, 11 Del. C. § 931, et seq.

44. Plaintiff incorporates by reference the allegations contained in the

preceding paragraphs as if fully set forth herein.

45. A person is liable for the computer crime of unauthorized access

when, knowing that the person is not authorized to do so, the person accesses or

causes to be accessed any computer system without authorization. 11 Del C. §

932.

46. A person is liable for the computer crime of interruption of computer

services when that person, without authorization, intentionally or recklessly

disrupts or degrades or causes the disruption or degradation of computer services

or denies or causes the denial of computer services to an authorized user of a

computer system. 11 Del. C. § 934.

47. A person is liable for the computer crime of misuse of computer

system information when: (1) As a result of accessing or causing to be accessed

a computer system, the person intentionally makes or causes to be made an

unauthorized display, use, disclosure or copy, in any form, of data residing in,

communicated by or produced by a computer system; (2) That person

intentionally or recklessly and without authorization: [a] Alters, deletes, tampers

with, damages, destroys or takes data intended for use by a computer system,

whether residing within or external to a computer system; or [b] Interrupts or adds

data to data residing within a computer system; (3) That person knowingly

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receives or retains data obtained in violation of paragraph (1) or (2) of this section;

or (4) That person uses or discloses any data which that person knows or believes

was obtained in violation of paragraph (1) or (2) of this section. 11 Del C. § 935.

48. On information and belief, John Doe, on his own or in concert with

others, willfully and maliciously violated each of these laws by, among other

things:

a. intentionally and without authorization deleting and/or tampering

with data intended for use by the Escrow Platform’s computer

system, including by sending and altering chat messages in the

Escrow Platform’s computer system;

b. intentionally and without authorization tampering with the

Escrow Platform’s computer system, including by (i) disabling

the Escrow Platform’s automated email function; (ii) releasing or

causing to be released funds held by the Escrow Platform in

escrow; and (iii) sending emails and sending and/or altering chat

messages in the Escrow Platform’s computer system.

c. intentionally and without authorization interrupting and/or

adding data to data residing within the Escrow Platform’s

computer system, including by sending emails and sending

and/or altering chat messages to Plaintiff.

d. intentionally making or causing to be made an unauthorized

display, use, and disclosure of data obtained by accessing or

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 causing to be accessed the Escrow Platform’s computer system,

including by sending emails and sending and/or altering chat

messages to Plaintiff.

e. knowingly receiving, retaining, and using data they knew to have

been obtained through the unlawful means described above,

including by receiving and transferring the stolen XRP.

f. intentionally or recklessly disrupting or degrading or causing the

disruption or degradation of computer services by the Escrow

Platform to Plaintiff, an authorized user of the Escrow Platform’s

computer system, for all of the reasons described above.

g. Knowingly, and knowing that they were not authorized to do so,

accessing or causing to be accessed the Escrow Platform’s

computer system without authorization, for all of the reasons

described above.

49. Plaintiff is an aggrieved person entitled to enforce the Misuse of

Computer System Information Act.

50. The above violations of the Misuse of Computer System Information

Act have proximately caused significant damages to Plaintiff.

51. Under Section 941 of the Act, Plaintiff is entitled to treble damages

because John Doe’s conduct was willful and malicious, as well as costs and

attorneys’ fees. 11 Del. C. § 941(c), (e).

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 COUNT 3

Fraud

52. Plaintiff incorporates by reference the allegations contained in the

preceding paragraphs as if fully set forth herein.

53. The elements of a claim for fraud or intentional misrepresentation

under Delaware law are: (1) a false representation or material omission by the

defendant; (2) with knowledge or belief of its falsity or with reckless indifference

to the truth; (3) intent to induce action or inaction; (4) the plaintiff’s response was

taken in justifiable reliance on the representation; and (5) an injury resulting from

such reliance. See Van Lake v. Sorin CRM USA, Inc., 2013 WL 1087583, at *12

(Del. Super. Feb. 15, 2013).

54. John Doe falsely represented to Plaintiff that she was entering into a

transaction on the Escrow Platform and would receive 46.5 BTC in exchange for

sending him 484,000 XRP.

55. John Doe knew that these representations were false when they were

made and/or acted with reckless indifference to the truth.

56. John Doe intended by these misrepresentations to induce Plaintiff to

send him 484,000 XRP.

57. Plaintiff justifiably relied on these misrepresentations when she sent

John Doe 484,000 XRP.

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 58. John Doe defrauded Plaintiff by causing the Escrow Platform not to

deliver the 46.5 BTC to Plaintiff, and to instead return it to him, despite the fact

that he had already received the 484,000 XRP from Plaintiff.

59. The fraudulent acts described above have proximately caused

significant damages to Plaintiff.

COUNT 4

Conversion

60. Plaintiff incorporates by reference the allegations contained in the

preceding paragraphs as if fully set forth herein.

61. The elements of conversion under Delaware law are: (1) a distinct

act of dominion (2) wrongfully exerted (3) over the property of another (4) in

denial of his right, or inconsistent with it. See, e.g., Data Mgmt. Internationale,

Inc. v. Saraga, 2007 WL 2142848, at *3 (Del. Super. July 25, 2007) (citing Drug,

Inc. v. Hunt, 168 A. 87, 93 (Del. 1933)).

62. John Doe is exercising dominion over the 484,000 XRP that were

stolen from Plaintiff.

63. John Doe’s dominion is wrongful because John Doe has no rightful

claim to the 484,000 XRP.

64. The 484,000 XRP rightfully and lawfully belongs to Plaintiff

because they were misappropriated from her through fraudulent and deceptive

means.

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 65. John Doe’s continued dominion over the 484,000 XRP is

inconsistent with and in denial of Plaintiff’s right to those assets.

66. John Doe’s conversion of the 484,000 XRP has proximately caused

significant damages to Plaintiff.

COUNT 5

Unjust Enrichment
(In The Alternative)
67. Plaintiff incorporates by reference the allegations contained in the

preceding paragraphs as if fully set forth herein.

68. The elements of an unjust enrichment claim under Delaware law are:

(1) an enrichment, (2) an impoverishment, (3) a relation between the enrichment

and impoverishment, (4) the absence of justification, and (5) the absence of a

remedy provided by law. Jackson Nat. Life Ins. Co. v. Kennedy, 741 A.2d 377,

393 (Del. Ch. 1999).

69. John Doe has enriched himself by appropriating the 484,000 XRP

that were stolen from Plaintiff.

70. Plaintiff has been impoverished by the loss of the 484,000 XRP.

71. John Doe’s continued dominion over the 484,000 XRP is

inconsistent with and in denial of Plaintiff’s right to those assets. Thus, John

Doe’s enrichment relates to Plaintiff’s impoverishment because his possession of

the 484,000 XRP is the cause of Plaintiff’s loss.

72. John Doe has no legal or equitable right to possess the 484,000 XRP.

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 73. Absent other relief requested by this Action, no other remedy at law

exists to restore the 484,000 XRP to Plaintiff.

74. Plaintiff seeks the immediate return of the 484,000 XRP in the

Bittrex Wallet.

COUNT 6

Declaratory Relief, 10 Del. C. § 6501

75. Plaintiff incorporates by reference the allegations contained in the

preceding paragraphs as if fully set forth herein.

76. The elements of a declaratory judgment action under Delaware law

are: (1) a controversy involving the rights or other legal relations of the party

seeking declaratory relief; (2) a controversy in which the claim of right or other

legal interest is asserted against one who has an interest in contesting the claim;

(3) the controversy must be between parties whose interests are real and adverse;

and (4) the issue involved in the controversy must be ripe for judicial

determination. Rollins Int’l, Inc. v. Int’l Hydronics Corp., 303 A.2d 660, 662

(Del. 1973).

77. A clear and immediate controversy exists involving Plaintiff’s right

to the 484,000 XRP currently located in the Bittrex Wallet.

78. Plaintiff’s right to the 484,000 XRP is being asserted against John

Doe, who currently possesses the 484,000 XRP and has an interest in contesting

the claim.

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 79. Plaintiff’s interest in the 484,000 XRP is real and adverse to the

claim asserted by John Doe.

80. The issues involved are ripe for judicial determination.

81. Plaintiff seeks a declaratory judgment that the 484,000 XRP in the

Bittrex Wallet belong to her. This count is not an admission that the return of the

484,000 XRP at its current market value would suffice to make Plaintiff whole or

compensate her for all of the damages she has suffered as a result of John Doe’s

conduct.

RELIEF REQUESTED
WHEREFORE, Plaintiff Elizabeth White respectfully requests that this

Court:

A. enter a judgment declaring that Plaintiff is the rightful owner of the

stolen XRP;

B. award Plaintiff damages caused by the fraudulent scheme, plus pre-

and post-judgment interest;

C. award Plaintiff treble damages;

D. award Plaintiff punitive and exemplary damages;

E. award Plaintiff costs and expenses incurred in this action, including

reasonable attorneys’ fees.

F. issue an order directing John Doe to return the stolen XRP to

Plaintiff;

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 G. issue an order directing John Doe to turn over other assets in the

Bittrex Wallet to Plaintiff in full or partial satisfaction of all amounts that may be

awarded to her in this action.

H. award Plaintiff such other and further relief as the Court may deem

just and proper.

POTTER ANDERSON & CORROON LLP

By: /s/ John A. Sensing

Of Counsel: John A. Sensing (No. 5232)
Steven G. Kobre Jesse L. Noa (No. 5973)
David H. McGill Hercules Plaza, Sixth Floor
Benjamin J.A. Sauter 1313 North Market Street
(pro hac vice pending) P.O. Box 951
KOBRE & KIM LLP Wilmington, Delaware 19899-0951
800 Third Avenue (302) 984-6000
New York, NY 10022 jsensing@potteranderson.com
(212) 488-1200 jnoa@potteranderson.com

Dated: February 23, 2018 Counsel for Plaintiff Elizabeth White

5652860 / 44764

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