Cryptocurrency & Digital Asset
Litigation
Former DOJ Prosecutors. Nationwide Federal Defense Against Freeze Orders, Clawback Demands, and Forfeiture Actions. Litigation of Token Offering, Smart Contract, and Stablecoin Disputes.
Armstrong & Bradylyons PLLC represents clients on both sides of cryptocurrency disputes. The firm defends individuals, businesses, executives, and innocent third parties against government and third-party freeze orders, clawback demands, forfeiture actions, and parallel regulatory proceedings. It litigates smart contract disputes, token offering disputes, and stablecoin disputes in federal courts nationwide. The firm also pursues civil claims to recover stolen or misappropriated digital assets in appropriate cases. Former DOJ Fraud Section prosecutor Scott Armstrong and former EDVA Financial Crimes Chief Drew Bradylyons lead every engagement.
Scott Armstrong served for nearly a decade at DOJ’s Fraud Section, including as an Assistant Chief in the Market Integrity and Major Fraud Unit. He supervised cryptocurrency fraud investigations and prosecutions nationwide. He tried 16 federal jury trials, including the first-ever cryptocurrency market manipulation case under Title 15 involving over $300 million in spoof and wash trades. His familiarity with blockchain technology, on-chain tracing, and the federal regulatory landscape allows him to handle crypto disputes from their earliest stages through trial.
Drew Bradylyons served as Chief of the Financial Crimes and Public Corruption Unit at the U.S. Attorney’s Office for the Eastern District of Virginia and previously supervised complex financial fraud cases at DOJ’s Fraud Section. Drew coordinated parallel criminal and civil enforcement matters at EDVA, one of the most active federal prosecution offices in the country. He understands firsthand how DOJ and federal regulatory agencies share information, align strategy, and pursue individuals across parallel proceedings. That experience is directly relevant to cryptocurrency litigation, where parallel criminal, civil, and regulatory proceedings are the norm.
Collectively, the firm’s attorneys have tried 25 federal jury trials in complex white-collar fraud cases in federal courts across the country. The firm handles cryptocurrency litigation in federal courts nationwide, including the Eastern District of New York, the District of Columbia, the Eastern District of Virginia, the District of Maryland, the District of New Jersey, the Southern District of Florida, the Northern District of California, and other federal districts where cryptocurrency disputes are concentrated.
The firm’s cryptocurrency litigation practice covers TRO and asset freeze defense, clawback and disgorgement defense, token offering and securities litigation, smart contract disputes, stablecoin disputes, parallel proceedings coordination, cryptocurrency forfeiture defense, and digital asset recovery. It builds on the firm’s cryptocurrency fraud defense practice in complex, multi-million-dollar federal investigations.
TRO and Asset Freeze Defense
The firm defends clients against Temporary Restraining Orders (TROs) and preliminary injunctions seeking to freeze cryptocurrency wallets, exchange accounts, and other digital asset holdings. Emergency freeze orders in crypto cases move fast. A TRO can lock an individual out of their digital assets within hours and often without notice. Unwinding a TRO and defending against it requires immediate action and counsel who understand both the federal procedural rules governing emergency relief and the underlying blockchain technology.
Government agencies, federal receivers, and private litigants all seek emergency freeze orders in cryptocurrency disputes. The firm challenges the legal and factual basis for these orders and works to protect its clients’ access to their digital assets. Where freeze orders are already in place, the firm moves to narrow or dissolve the orders to protect its clients’ legitimate assets.
Clawback and Disgorgement Defense
Federal receivers appointed in SEC and CFTC enforcement cases routinely pursue clawback and disgorgement actions against individuals who received funds from entities later determined to be fraudulent. These actions target investors, employees, vendors, and counterparties who may have had no knowledge of or involvement in the underlying fraud.
Clawback demands can be devastating. A federal receiver may seek to recover profits, principal, salary, commissions, or other payments received from the entity under receivership. The firm defends individuals and businesses against these demands. It challenges the receiver’s tracing methodology, the legal basis for the clawback, and the factual predicate for disgorgement. In this way, the firm defends its clients’ legitimate assets from unexpected litigation involving conduct from years prior.
Token Offering and Securities Litigation
The firm represents founders, promoters, and executives of token generation events (TGEs), initial DEX offerings (IDOs), initial exchange offerings (IEOs), and legacy initial coin offerings (ICOs) in civil disputes involving allegations of securities fraud, breach of fiduciary duty, and misrepresentation. These disputes arise when investors bring claims alleging that a digital asset constitutes an unregistered security under the Howey test, that offering materials contained material misrepresentations, or that offering proceeds were misappropriated. Post-launch underperformance has compounded this exposure. Industry data indicate that the substantial majority of 2025 token launches trade below their issue price, fueling a new wave of investor claims that promised utility, valuation, or roadmap deliverables never materialized.
The legal framework changed materially in March 2026. The SEC and CFTC joint interpretive release superseded the SEC’s 2019 framework and established a five-category taxonomy of digital assets: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. The release classified eighteen major cryptocurrencies, including BTC, ETH, SOL, and XRP, as digital commodities that are not securities. Investment contract status now turns primarily on the representations and promises an issuer makes to purchasers and is not permanent. The release has reshaped token-classification disputes in federal court and in state regulatory proceedings.
The firm challenges the classification of digital assets as securities, defends against investor fraud claims, and litigates disputes over token economics, vesting schedules, and distribution mechanisms. State enforcement remains active even where federal enforcement has stepped back. The firm represents clients against actions filed by State Attorneys General, including the New York Attorney General’s Office, as well as various State Securities Boards.
Smart Contract Disputes
The firm litigates disputes arising from failed, exploited, or contested smart contract executions. Smart contracts are self-executing code deployed on a blockchain. When these contracts fail, are exploited, or produce disputed outcomes, resolution turns on questions of contract interpretation, code review, blockchain operability, and federal civil procedure. The pullback in federal regulatory enforcement against DeFi protocols has not slowed this litigation. It has accelerated the shift toward private civil claims by users, counterparties, and investors against protocols, developers, and operators.
Smart contract disputes include claims arising from DeFi protocol exploits and vulnerabilities, liquidity pool manipulation, contested token launches and distributions, oracle manipulation, flash loan attacks, and disputes over governance token voting and protocol upgrades. The firm works with subject matter experts to review smart contract code, DeFi protocol architecture, and token economics to build or defend claims, drawing on substantial federal court litigation experience.
Stablecoin Disputes
The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) established the federal stablecoin framework in 2025. Stablecoin issuers, custodians, and counterparties now face a defined regulatory regime, along with a new generation of disputes. The firm handles stablecoin reserves disputes, redemption disputes, depeg litigation, and disputes between issuers and counterparties over compliance with federal reserves attestation requirements. The firm also represents holders and counterparties in private civil claims arising from stablecoin failures.
Parallel Proceedings Coordination
Cryptocurrency disputes frequently generate parallel criminal, civil, and regulatory proceedings arising from the same set of facts. A single course of conduct may produce a DOJ criminal investigation, an SEC or CFTC enforcement action, a FinCEN enforcement action, an OFAC sanctions matter, a state attorney general investigation, a state securities board action, civil forfeiture proceedings, and private civil litigation by investors or counterparties. Federal receivers appointed in pre-2025 SEC and CFTC cases continue to operate, generating their own track of clawback and disgorgement litigation years after the underlying enforcement action.
Scott Armstrong and Drew Bradylyons coordinate the defense of individuals across all of these proceedings. They guard against the prospect that actions taken on behalf of a client in one forum will compromise the client’s position in another. Drew Bradylyons coordinated parallel criminal and civil enforcement matters as Chief of the Financial Crimes and Public Corruption Unit at EDVA. Scott Armstrong coordinated parallel criminal, SEC, CFTC, and receiver proceedings as an Assistant Chief at DOJ’s Fraud Section. They understand firsthand how DOJ and the regulatory agencies share information, align strategy, and pursue individuals across multiple proceedings.
Cryptocurrency Forfeiture Defense
Federal law enforcement agencies routinely seek to seize and forfeit cryptocurrency in connection with fraud and money laundering investigations. The government may obtain seizure warrants for cryptocurrency held in exchange accounts, hardware wallets, software wallets, and smart contracts. Civil and criminal forfeiture proceedings under 18 U.S.C. §§ 981 and 982 and 21 U.S.C. § 853 can result in the permanent loss of substantial digital asset holdings.
The firm defends individuals against cryptocurrency seizure and forfeiture actions. It challenges the government’s tracing evidence, the nexus between the assets and alleged criminal activity, and the procedural basis for seizure. Forfeiture defense in crypto cases demands counsel who understand both the federal forfeiture statutes and the blockchain analytics evidence the government relies on to trace and attribute digital assets.
Digital Asset Recovery
In appropriate cases, the firm pursues civil claims to recover cryptocurrency and digital assets that have been stolen, misappropriated, or fraudulently obtained. Recovery actions are built around blockchain tracing, emergency relief in federal court to freeze assets before they dissipate, and conversion, fraud, and unjust enrichment claims against private actors. The firm works with established blockchain tracing firms and, where appropriate, refers matters to FBI, IRS-CI, and other federal law enforcement so that parallel criminal investigation can complement civil recovery.
Armstrong & Bradylyons PLLC’s cryptocurrency and digital asset litigation practice combines substantive blockchain knowledge, command of federal litigation procedure, and trial experience. These capabilities drive every phase of a cryptocurrency dispute, from the initial demand letter through verdict.
Scott Armstrong and Drew Bradylyons built and tried complex financial fraud cases at DOJ. That experience translates directly to civil cryptocurrency and digital asset litigation. The firm develops case theories from complex financial data, manages discovery in document-intensive matters, retains and prepares expert witnesses, and distills complex blockchain evidence into clear arguments for a federal judge or jury.
On-Chain Tracing and Blockchain Evidence
Blockchain analytics evidence drives almost every cryptocurrency dispute. The government and federal receivers use tracing to attribute wallets, follow funds, support freeze orders, and justify clawback demands. The firm’s attorneys have worked with blockchain transaction data for years, both as federal prosecutors building cases and as defense counsel attacking the government’s tracing methodology. The firm also works with established cryptocurrency tracing firms when independent analysis is needed.
The firm’s tracing experience is critical at every stage of a federal court dispute. Judges granting or denying TROs and asset freezes require specific, reliable evidence of where the assets are and how they got there. Whether challenging the government’s wallet attribution or building a defense to a clawback demand, the firm knows how to identify, evaluate, and present that evidence in court.
Smart Contract and Protocol Analysis
Armstrong & Bradylyons PLLC works with subject matter experts to review smart contract code, DeFi protocol architecture, and token economics to build or deconstruct the factual and technical basis of a federal complaint. In disputes involving protocol exploits, contested token distributions, or failed smart contract executions, Scott Armstrong and Drew Bradylyons translate complex blockchain technology into clear, persuasive evidence for federal judges and juries.
Digital Asset Classification and Regulatory Defense
Many cryptocurrency disputes turn on whether a digital asset is classified as a security, commodity, money transmitting instrument, or stablecoin. The March 2026 SEC/CFTC joint interpretive release reshaped that analysis by establishing a five-category taxonomy and classifying eighteen major tokens as digital commodities outside SEC jurisdiction. The 2025 GENIUS Act added a defined regulatory regime for stablecoins. The firm uses this updated framework to challenge classifications in federal court and in state regulatory proceedings, where state attorneys general and state securities boards remain active even where federal regulators have pulled back.
Federal Trial Experience in Crypto Cases
The firm’s cryptocurrency litigation practice is backed by 25 federal jury trials. Scott Armstrong tried the first-ever cryptocurrency market manipulation case under Title 15, a multi-week trial involving over $300 million in alleged spoof and wash trades, voluminous exchange data, and blockchain tracing evidence. That trial experience changes the calculus at every stage of a dispute, from the initial demand through settlement negotiations, and is the foundation of the firm’s defense work in cryptocurrency cases.
Armstrong & Bradylyons PLLC represents a range of clients in cryptocurrency litigation and digital asset disputes in federal courts nationwide.
Cryptocurrency Executives and Founders
The firm represents cryptocurrency exchange executives, token founders, and protocol developers in civil disputes arising from digital asset offerings, platform operations, and investor claims. The firm also defends these individuals against government freeze orders, forfeiture actions, and parallel regulatory proceedings.
DeFi Protocol Developers and Operators
The firm represents DeFi protocol developers and operators in disputes involving protocol exploits, liquidity pool disputes, governance disputes, and claims arising from contested smart contract executions. The firm’s technical capability in reviewing smart contract code and protocol architecture is critical in these matters.
Crypto Traders and Market Makers
The firm represents cryptocurrency traders, market makers, and trading firms in disputes involving market manipulation allegations, contested trade executions, exchange disputes, and regulatory enforcement actions. Scott Armstrong tried the first-ever crypto market manipulation case under Title 15. That trial experience shapes the firm’s representation of trading professionals.
Crypto Fund Managers and Advisors
The firm represents cryptocurrency fund managers, commodity trading advisors, and investment advisors in disputes with investors, regulatory enforcement actions, and clawback proceedings. These matters frequently involve allegations of mismanagement, misrepresentation of fund performance, and misappropriation of investor assets.
Third Parties and Innocent Recipients
The firm represents individuals and businesses who received cryptocurrency from entities later placed into receivership or subject to government forfeiture. These clients may have had no knowledge of or involvement in the underlying fraud. The firm defends them against clawback demands, freeze orders, and forfeiture proceedings.
Investors and Token Holders
The firm represents investors and token holders in clawback and disgorgement actions brought by federal receivers in SEC and CFTC enforcement cases. In appropriate matters, the firm also pursues civil claims on behalf of investors to recover digital assets lost to fraud, misappropriation, or protocol exploits.
The firm’s attorneys have represented clients in high-stakes cryptocurrency litigation and digital asset disputes at every stage. The following matters are representative of the firm’s cryptocurrency litigation practice.
Secured the complete dismissal of an emergency TRO filed in federal court that improperly froze several cryptocurrency accounts of a crypto-trading executive.
Secured a Temporary Restraining Order in federal court on behalf of a victim of a $12 million poison-address attack orchestrated by international threat actors.
Negotiated the complete withdrawal of a clawback demand from a federally appointed receiver seeking approximately $1 million from an executive who had invested in a crypto and forex investment platform that was later determined to have operated as a Ponzi scheme.
Secured the complete dismissal of an Emergency Cease and Desist Order filed by the Texas State Securities Board against executives of the Apertum Foundation for alleged fraud relating to the Apertum Token (APTM).
Represented the founder of a leading DeFi protocol in connection with an investigation by the New York Attorney General (NYAG) into whether the protocol offered unregistered securities and did not disclose alleged protocol risks to users.
Represented a cryptocurrency mining and lending protocol, as well as its CEO, in a DOJ investigation involving alleged investor fraud.
Represented executives of a leading U.S. token in an SEC investigation concerning alleged misrepresentation, misappropriation, and market manipulation.
Represented a leading money-services business in litigation arising from a botched recovery effort involving over $3 million in USDC.
Represented a leading money-services business that was the victim of a $5 million embezzlement involving the laundering of funds through international cryptocurrency exchanges.
Represented a foreign national against a federal indictment charging conspiracy to commit wire fraud and conspiracy to commit money laundering for allegedly orchestrating a $260 million “social engineering” crypto heist.
At DOJ, served as lead trial counsel in the first-ever trial conviction for conspiracy to commit securities price manipulation under Title 15 involving cryptocurrency and over $300 million in spoof orders and wash trades placed via an automated trading bot.
The drivers of cryptocurrency litigation have shifted. Federal regulatory enforcement against digital asset companies has receded as DOJ, the SEC, and the CFTC have pulled back from regulating-by-enforcement. The April 7, 2025 Deputy Attorney General memorandum titled “Ending Regulation by Prosecution” directs DOJ not to pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets. The SEC under Chairman Paul Atkins has dropped most of the Biden-era enforcement actions that lacked accompanying fraud allegations. The CFTC has directed staff not to charge regulatory violations in cases involving digital assets absent fraud.
Cryptocurrency litigation, however, has not slowed. It has changed direction. State attorneys general and state securities regulators remain active. Private civil plaintiffs, including investors, counterparties, and protocol users, are filing the claims that federal agencies are no longer pursuing. DOJ continues to prosecute genuine cryptocurrency fraud aggressively. Federal receivers appointed in pre-2025 enforcement cases continue to operate, generating ongoing clawback exposure years after the underlying enforcement action. The March 2026 SEC/CFTC joint interpretive release on the application of securities laws to crypto assets reshaped the Howey framework and produced its own wave of disputes over how the new five-category taxonomy applies to specific tokens. The 2025 GENIUS Act established the federal stablecoin framework, opening a new category of stablecoin reserves, redemption, and depeg disputes.
What Is Cryptocurrency Litigation?
Cryptocurrency litigation refers to civil legal disputes involving digital assets such as Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP, stablecoins, DeFi governance tokens, and NFTs. It covers a range of overlapping practice areas: defense against federal asset freeze orders and Temporary Restraining Orders under Federal Rule of Civil Procedure 65, clawback and disgorgement actions brought by federal receivers in SEC and CFTC cases, civil and criminal forfeiture proceedings under 18 U.S.C. §§ 981 and 982, smart contract and DeFi protocol disputes, token offering and securities disputes under the Howey framework, GENIUS Act stablecoin disputes, private investor class actions, and, in appropriate cases, civil claims to recover stolen or misappropriated cryptocurrency.
Cryptocurrency litigation is distinct from cryptocurrency fraud defense, which involves defending individuals against federal criminal charges brought by DOJ, the SEC, or the CFTC for wire fraud, money laundering, securities fraud, or commodities fraud. Armstrong & Bradylyons PLLC handles both sides of the practice.
When Is a Crypto Token a Security Under the Howey Test in 2026?
The analysis begins with the March 2026 SEC/CFTC joint interpretive release on the application of U.S. securities laws to crypto assets, which superseded the SEC’s 2019 framework. The release establishes a five-category taxonomy of digital assets: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. It classifies eighteen major cryptocurrencies, including BTC, ETH, SOL, and XRP, as digital commodities that are not securities and that fall outside SEC jurisdiction.
Investment contract status under SEC v. W.J. Howey Co. now turns primarily on the representations and promises an issuer makes to token purchasers. A non-security crypto asset can become subject to an investment contract when an issuer offers it with explicit promises to undertake essential managerial efforts from which purchasers would reasonably expect profits. Investment contract status is not permanent and can change as a network decentralizes. Scott Armstrong tried the first federal jury trial conviction for cryptocurrency market manipulation under Title 15 of the U.S. Code and brings direct experience applying securities law to digital assets to every token-classification dispute the firm handles.
What Is a Federal Receiver Clawback Action in a Cryptocurrency Case?
A clawback action is a civil claim brought by a court-appointed federal receiver or trustee to recover funds, cryptocurrency, or other property paid to investors, employees, vendors, promoters, or other recipients from an entity later determined to have operated as a fraud or Ponzi scheme. Receivers typically proceed under state-law fraudulent transfer statutes, the Uniform Voidable Transactions Act, common-law unjust enrichment, and the equitable powers of the appointing court.
In cryptocurrency cases, receivers appointed in pre-2025 SEC and CFTC enforcement actions continue to pursue clawback demands against individuals who received profits, principal, salary, commissions, referral fees, or token allocations from the entity in receivership. These actions can target individuals who had no knowledge of or involvement in the underlying fraud. Drew Bradylyons coordinated parallel criminal and civil enforcement matters involving federal receivers as Chief of the Financial Crimes and Public Corruption Unit at EDVA.
The FBI or IRS-CI Seized My Cryptocurrency. What Are My Rights?
Federal seizure of cryptocurrency under 18 U.S.C. § 981 (civil forfeiture) or as part of a criminal proceeding under 18 U.S.C. § 982 and 21 U.S.C. § 853 can result in the permanent loss of the seized digital assets. Owners have specific procedural rights, including the right to receive notice, the right to file a claim contesting the forfeiture, the right to a hearing, and the right to challenge the government’s blockchain tracing evidence and the nexus between the seized assets and alleged criminal activity.
Strict deadlines apply. In an administrative (non-judicial) civil forfeiture proceeding, a claimant must file a verified claim within thirty-five days of the date the seizing agency mails the notice of seizure, under 18 U.S.C. § 983(a)(2). In a judicial civil forfeiture proceeding, claim deadlines are governed by Supplemental Rule G of the Federal Rules of Civil Procedure. Missing the deadline forfeits the right to contest. Counsel familiar with both federal forfeiture procedure and blockchain analytics evidence is critical at the earliest stage.
I Received a Demand Letter from a Federal Receiver. What Should I Do?
Retain experienced federal defense counsel immediately. Do not respond to the receiver or produce documents without legal representation. Receivers regularly use voluntary productions and informal interviews to develop the factual record that supports a later clawback complaint.
A demand letter from a federal receiver appointed in an SEC or CFTC enforcement case is a serious matter. It can result in the recovery of profits, principal, salary, commissions, referral fees, or token allocations received from the entity in receivership. Effective response strategy depends on the receiver’s tracing methodology, the structure of the underlying transactions, the recipient’s knowledge and good-faith defenses, statute of limitations, and potential parallel exposure in DOJ or state regulatory proceedings. The firm negotiates with receivers to reduce or eliminate clawback liability and litigates clawback complaints in federal court when negotiation is not possible.
Can the SEC Still Sue My Crypto Project After the 2025 DOJ Policy Change?
Yes, where fraud is alleged. The April 7, 2025 Deputy Attorney General memorandum “Ending Regulation by Prosecution” directs DOJ not to pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets. The SEC under Chairman Paul Atkins has dropped most Biden-era enforcement actions that lacked accompanying fraud allegations, and the CFTC has directed staff not to charge regulatory violations in digital asset cases absent fraud.
None of that protects a project where fraud, market manipulation, or material misrepresentation is alleged. DOJ continues to prosecute genuine cryptocurrency fraud aggressively, and the SEC and CFTC continue to bring enforcement actions where fraud is the gravamen of the complaint. State attorneys general and state securities regulators, including the New York Attorney General and the Texas State Securities Board, remain active in pursuing digital asset projects that federal regulators have declined to charge. Private civil plaintiffs file investor fraud and securities class actions independently of any government action.
What Is the GENIUS Act and How Does It Affect Stablecoin Issuers?
The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), enacted in 2025, established the first federal regulatory framework for payment stablecoins. The Act addresses permitted issuers, reserves backing requirements, redemption rights, attestation and audit obligations, custody rules, and federal preemption of inconsistent state regulation.
The Act has also opened a new category of cryptocurrency litigation. Disputes involve reserves attestation compliance, redemption disputes between issuers and holders, depeg litigation arising from stablecoin failures, custodial disputes, and counterparty claims involving stablecoin transactions. The firm represents stablecoin issuers, custodians, and counterparties in these matters and represents holders in private civil claims arising from stablecoin failures.
What Is a Smart Contract or DeFi Protocol Dispute?
A smart contract dispute arises when a self-executing program deployed on a blockchain fails, is exploited, or produces a disputed outcome. These disputes are now the fastest-growing category of cryptocurrency litigation, fueled by the federal pullback from DeFi regulatory enforcement and the corresponding rise in private civil claims by users, counterparties, and investors.
Smart contract disputes include claims arising from DeFi protocol exploits and vulnerabilities, flash loan attacks, oracle manipulation, liquidity pool manipulation, contested token launches and TGE distributions, governance token voting disputes, and protocol upgrade disputes. Litigation typically requires review of the underlying Solidity or Rust code, expert testimony from blockchain engineers, and the ability to present complex technical evidence to a federal judge or jury. Scott Armstrong tried the first federal trial conviction for cryptocurrency market manipulation involving an automated trading bot and over $300 million in spoof and wash trades, the type of automated on-chain conduct now at issue in many DeFi exploit cases.
Can State Regulators Still Bring Crypto Cases After the Federal Pullback?
Yes. State attorneys general and state securities regulators remain among the most active enforcers in cryptocurrency. The New York Attorney General (NYAG), the Texas State Securities Board, the California Department of Financial Protection and Innovation, and similar state regulators continue to pursue cryptocurrency cases that federal regulators have declined to bring under the post-2025 policy shift.
State enforcement now drives a significant share of cryptocurrency litigation against digital asset projects, token issuers, DeFi protocols, and their executives. The firm has obtained the complete dismissal of an Emergency Cease and Desist Order filed by the Texas State Securities Board against an executive in the Apertum Foundation matter and has represented clients in New York Attorney General investigations of DeFi protocols.
What Is a Token Offering Dispute and How Does TGE Underperformance Drive Litigation?
A token offering dispute is a civil claim arising from a token generation event (TGE), initial DEX offering (IDO), initial exchange offering (IEO), or legacy initial coin offering (ICO). Common claims allege that a token constitutes an unregistered security under Howey, that offering materials contained material misrepresentations or omissions in violation of Section 17(a) of the Securities Act or SEC Rule 10b-5, that offering proceeds were misappropriated, or that promised utility, valuation, or roadmap deliverables never materialized.
Post-launch underperformance is now a major driver of these claims. Industry data indicate that the substantial majority of 2025 token launches trade below their issue price, generating a wave of investor lawsuits and private securities class actions against TGE issuers, founders, promoters, and executives. The firm represents these defendants in federal court and in state regulatory and enforcement proceedings.
Why Does Former DOJ Fraud Section Experience Matter in Cryptocurrency Litigation?
Cryptocurrency litigation routinely arises directly from or runs parallel to federal criminal and regulatory enforcement activity. Clawback actions are brought by receivers appointed in SEC and CFTC cases. Forfeiture proceedings are driven by DOJ investigations. TROs and freeze orders are sought in the wake of federal enforcement activity. Token classification disputes turn on the same legal framework the SEC applies in its own enforcement matters.
Scott Armstrong served as an Assistant Chief in the Market Integrity and Major Fraud Unit of DOJ’s Fraud Section. He tried 16 federal jury trials, including the first-ever cryptocurrency market manipulation case tried under Title 15. Drew Bradylyons served as Chief of the Financial Crimes and Public Corruption Unit at the U.S. Attorney’s Office for the Eastern District of Virginia and previously supervised complex financial fraud cases at the DOJ Fraud Section. That direct prosecution-side experience allows the firm to anticipate the government’s strategy, protect the client’s position across parallel proceedings, and leverage knowledge of federal enforcement dynamics in civil litigation.
In What Federal Districts Does Armstrong & Bradylyons Handle Cryptocurrency Litigation?
Armstrong & Bradylyons PLLC handles cryptocurrency and digital asset litigation in federal courts nationwide as part of its broader federal white-collar defense and trial practice. The firm’s attorneys have litigated and tried cases across the country, including the District of Columbia, the Eastern District of Virginia (Alexandria), the Western District of Virginia (Charlottesville and Roanoke), the District of Maryland (Greenbelt), the District of New Jersey (Newark), the Eastern District of New York, the Northern District of Illinois (Chicago), the Southern District of Ohio (Columbus), the Eastern District of Michigan (Detroit), the Northern District of Georgia (Atlanta), the Eastern District of North Carolina (Raleigh), the Middle District of Tennessee (Nashville), the Eastern District of Tennessee (Knoxville), the Eastern District of Louisiana (New Orleans), the Southern District of Florida (Miami and Fort Lauderdale), the Middle District of Florida (Orlando), the Northern District of Texas (Dallas), the Southern District of Texas (Houston), the District of Colorado (Denver), the Central District of California (Los Angeles), and the Northern District of California (San Francisco). The firm obtains pro hac vice admission in any federal district where a client faces litigation.
The firm also defends individuals and entities in federal cryptocurrency fraud and money laundering criminal cases, covering wire fraud, securities fraud, commodities fraud, money laundering, and computer fraud charges brought by DOJ, the SEC, and the CFTC.