No shortcuts by default: what recent US crypto cases teach about jurisdiction, identity and non-participation

Justin P Lee
Wuersch & Gering LLP, New York
justin.lee@wg-law.com

Crypto fraud may be borderless; jurisdiction is not. Digital assets can move through several wallets, exchanges and countries in minutes, while the individuals behind those transfers may use aliases, impersonate legitimate businesses or simply decline to appear. That combination can make default judgment seem like the natural route to relief. Yet a default judgment is not a substitute for jurisdiction, valid service, reliable attribution or proof of damages.

Three US decisions from the past year illustrate the point from different angles. Together, they have moved the needle not by creating crypto-specific procedure, but by applying traditional safeguards with increasing precision to disputes involving digital assets and absent or disengaged parties.

The asset's situs is a starting point, not a jurisdictional trump card

In Timoria LLC v. Anis, C.A., No. 2025-0883-JTL, 2025 WL 2827657 (Del. Ch. 6 October 2025), a cryptocurrency-focused online casino alleged that remote employees in Algeria and Saudi Arabia had wrongfully transferred more than 1,000 Ether. The casino assigned its rights to a Delaware limited liability company, which sought relief against the Ether and orders that would bind persons holding or claiming it. One foreign defendant never appeared.

The Delaware Court of Chancery held that Ether, as intangible property, is located at a minimum at its owner’s domicile and was therefore situated in Delaware. But the court still dismissed the action. Situs alone did not create the minimum contacts required to bind the foreign individuals, and an assignment to a Delaware entity could not manufacture those contacts. The court also declined to adopt broader theories locating Ether wherever a blockchain node exists or wherever the asset can be accessed.

For litigators, Timoria requires two separate maps: an asset map and a jurisdictional map. Blockchain tracing may show where value moved, but it does not necessarily show that a defendant purposefully directed conduct toward the forum. Nor does asset presence alone authorize orders binding a foreign holder or custodian.

Non-participation is not a single procedural category

A defendant that never appears stands differently from one that appears, invokes the court’s authority and then abandons the proceeding. Safex Foundation, Inc. v. SafeLaunch Ventures Ltd., No. 22-cv-572, 2025 WL 2377972 (D.D.C. 15 August 2025), concerned a foreign crypto company accused of infringing the claimant’s marks. The court had initially found the jurisdictional record insufficient and allowed limited discovery. SafeLaunch's counsel later withdrew; the company did not obtain replacement counsel and did not answer the jurisdictional discovery.

The court held that SafeLaunch had forfeited its personal-jurisdiction defense. By appearing to litigate that question and then abandoning it before a final determination, the company had acquiesced in the court’s authority to decide it. The court entered default judgment on liability and granted declaratory and injunctive relief, while requiring separate proof of monetary relief.

The distinction matters in any cross-border case involving a disengaged counterparty. Counsel should reconstruct the procedural history carefully: Was there no appearance, a limited appearance, an express reservation, participation in jurisdictional discovery, or an abandoned objection? “Default” describes an outcome, not a uniform jurisdictional posture.

Attribution must precede liability

Shah v. State Street Global Advisors, No. 3:25-cv-00418 (W.D.N.C. March 5, 2026), shows the danger of moving from a trading platform’s branding to the identity of a defendant. The claimant alleged that he had transferred cash and cryptocurrency to an “SSGA” platform and obtained a US$650,000 default judgment against State Street. The evidence later showed that the claimant had apparently dealt with fraudsters who misused the SSGA name; the legitimate State Street entity offered no crypto trading services and had no connection to the platform or the claimant.

The court set aside the judgment under Rules 55(c) and 60(b) of the Federal Rules of Civil Procedure. Among other things, the defendant had a complete merits defence and little or no connection to North Carolina, making the jurisdictional basis doubtful. The decision is a useful reminder that an app name, logo, token ticker, email domain or self-description is not corporate attribution. A wallet address likewise proves a transaction, not necessarily the natural or legal person controlling the wallet.

Build the record for the enforcement court

A default judgment is often only the midpoint of a cross-border recovery. The claimant may still need recognition, execution against assets or cooperation from an exchange in another jurisdiction. The record should therefore be designed backward from the court that will be asked to enforce the result. Five practices follow from the recent cases:

• Plead jurisdiction defendant by defendant and claim by claim. Identify the forum-directed communications, transactions or conduct; do not rely only on the claimant’s residence, the place of loss or the asserted location of the digital asset.
• Treat service as future enforcement evidence. Preserve the applicable service convention, court authorizations for alternative service, translations, delivery records and evidence of actual notice. Novel service methods may be useful, but they should supplement rather than obscure a defensible notice record.
• Prove identity and control. Link wallet activity to people or entities through exchange records, KYC information, domain and app records, communications, corporate documents and admissible tracing evidence. State the methodology and distinguish inference from verified fact.
• Prove causation and quantum independently. Default may establish well-pleaded liability allegations, but it does not automatically establish damages. Use transaction hashes, account records, valuation dates and a transparent calculation that an enforcement court can reproduce.
• Match the remedy to the jurisdictional hook. An order determining title to an asset is not necessarily a basis for compelling foreign persons or custodians to act. Frame freezing, disclosure and turnover relief with the forum's power over each target in mind.

The same enforcement-first discipline applies at the arbitration-litigation boundary. A tribunal may proceed when a properly notified respondent declines to participate, but a later recognition court may examine the validity and scope of the arbitration agreement and whether the respondent received proper notice and an opportunity to present its case under Article V of the New York Convention. The procedural record should therefore show the jurisdictional ruling, every material notice attempt, the evidence supporting attribution and damages, and the nexus between the relief granted and the decision-maker's authority.

Conclusion

The principal development of the past year is a return to first principles. Courts are willing to apply established jurisdictional and default rules to new forms of property, but they will not treat the borderless character of crypto as a reason to dispense with due process. Default can advance a case when a properly identified and notified defendant chooses not to participate. It cannot repair the wrong forum, the wrong defendant or an incomplete evidentiary record. In cross-border crypto disputes, the record that wins by default must also be the record that survives recognition and enforcement.